Regulating the Irish pensions regime in circumstances of "fragility and uncertainty about the future" will be a "formidable challenge", chairman designate of the Pensions Authority David Begg has said.

Mr Begg was before the Joint Oireachtas Committee on Education and Social Protection on Wednesday to engage with members on his appointment.

Tánaiste Joan Burton's announcement earlier this month of her intention to appoint Mr Begg, a former general secretary of the Irish Congress of Trade Unions, provoked controversy.

Mr Begg told the committe that in the public discourse which had attended his appointment, “nothing at all was said about the challenges to public policy posed by the requirement to ensure that the pensions regime is sustainable into the future”.

He therefore welcomed the opportunity to set out his views to the committee.

“The task of regulating the Irish pensions regime is one which requires a balance between security and viability in circumstances of fragility and uncertainty about the future. Frankly, it will be a formidable challenge,” he said.

“My suitability for the position of chairman of the authority has been discussed at length, if not in depth, in recent weeks.”

Mr Begg said that obviously his own view was “subjective” and he submitted his CV to the committee members asking them to make their own judgment.

A great deal of what had been said in the Dáil in relation to his involvement with discussions on the Aer Lingus pension scheme had been "a travesty of the truth", he told the committee.

“My involvement was quite complex because I was general secretary of Congress and a director of Aer Lingus.

“Thus I had to craft a solution that, at least to some degree, satisfied shareholders, serving staff and deferred pensioners. It took three years to work it out.”

Pension problems

He said he was willing to discuss his involvement in finding solutions to a range of pension problems over the last few years “for as long, and in as much detail, as the committee wishes”.

“I hope that the committee will accept that, contrary to what has been asserted, I do have some knowledge of pensions.”

Occupational pensions coverage in Ireland varied from around 90 per cent in the public sector to 41 per cent in the private sector with an overall coverage amounting to 51 per cent, Mr Begg said.

"Ireland is unique in having a very large number of pension schemes, 150,000. Of all pension schemes in Europe, half are in Ireland (Netherlands, for example, has 400 schemes). Pension funds of €90 billion equate to approximately half of Ireland's GDP and are the third highest in Europe after the Netherlands and UK."

He said the most important concern was that half the population had no pension coverage other that the state old age pension.

This would remain central because of its role in preventing poverty in retirement.

“Around 90 per cent of elderly people receive a social welfare pension and these pensions account for 62.7 per cent of their retirement income. Social transfers reduce the ‘at risk of poverty’ rate for those over 65 from 88.3 per cent to 12.2 per cent,” Mr Begg said.

The concept of a mandatory ‘second tier” pension was now under active consideration but there were many issues to be resolved

“Experience in other countries suggests that it is difficult to make this work effectively for lower paid workers or people in precarious employment. Moreover, it may be hard to get contributions up to an adequate level to provide sufficient income replacement in retirement.”

Mr Begg said the alternative approach would be to significantly improve universal provisions via the existing State structure.

“The current pensions landscape in Ireland presents a picture which is not sustainable. Considerable reform will be necessary to make it so, not least in relation to the number of occupational and private pension schemes in respect of which Ireland is an outlier in Europe”