When Politics, Pensions and Construction Collide
In its latest instalment for Irish building magazine CPAS looks at the complex area of Politics, Pensions and Construction, and as the pension provider for the construction sector offers advice and solutions to assist in getting pension savings and cover in place.
The pensions issue has been raised as an impending problem for decades. More recently, in early 2020, before the COVID-19 pandemic changed our lives beyond anything we could have ever imagined (or feared) and Britain left the EU, Ireland went to the polls to elect a Government. While the most hotly contested topics were health and housing, political parties (and media pundits) were surprised to learn that it was in fact pensions that came in as number three on the list of concerns for voters, ahead of Brexit. While we can’t say for certain what was on the minds of those who went to the polls that day, it is interesting to note that 62% of those who voted were between the ages of 18 – 24.
There were two aspects to pensions that have become somewhat combined into one major worry for voters, i.e. the proposed incremental increase to the pension age to 67 in 2021 and 68 by 2028, (which is a necessity to ensure the long term sustainability of the State Pension) and secondly that many people are obliged to retire at 65 and as a result, have to ‘go on the dole’ for a year or more until they qualify for the State Pension.
In Budget 2021, the Government decided it was not the time to increase the pension age but this does not mean that the problem no longer exists. In fact, some see this as the Government ‘kicking the can down the road’ along with auto-enrolment. In addition, the requirement for pensioners to ‘sign on’ weekly was discontinued to ease the administrative requirements on those who are close to the retirement age but cannot claim the State Pension immediately.
The State Pension (or ‘First Pillar’ of pension provision), in Ireland is generous. The State will provide a fixed income for those who are eligible from the time they reach 66 years of age until they pass away. On the flip side, the State Pension is not provided so our pensioners can maintain a home to the standard they are used to or pay for unexpected health costs outside of the public health system. In fact, the charity Alone stated that many pensioners were being pushed to the limits of their ability to pay for unexpected energy costs incurred as a result of staying home during the pandemic.
There is a real possibility we will not be able to rely on the State Pension in the future due to an aging population among other elements. This is where the ‘Second Pillar’ or occupational pension is vital and can be used as a benefit to attract skilled employees at a time when these are a scarce resource. As an employer, you can help your employees prepare for retirement and develop this as an incentive to attract and retain employees.
Skilled staff shortages have been widely publicised by the CIF and industry leaders of late. This ongoing shortage appears to be affecting every company – large and small – across the construction and related sectors. It is particularly acute in the areas of skilled workers. Construction companies compete with one another to attract a limited pool of skilled staff. A competitive salary and career prospects play a part in staff attraction and retention, but it is not always the deciding factor for employees. A broader benefits package can sway a prospective employee, which might include health, life and sickness cover in addition to a pension. These individuals are looking towards their future and want to ensure they are covered for all eventualities. You may find these factors appear during the interview process, in addition to the usual salary negotiations.
CPAS – The Pension Provider for the Construction Sector
Now is the time for the construction sector to make a difference to the future of all their employees through pension savings and cover. Our team of consultants is available for no obligation, virtual calls to help you navigate these options.
For more information, please get in touch with our team of consultants who can provide more information (email@example.com).