Sir, – Jerry Moriarty's article on pensions is timely, well-argued and extremely important ("Pensions timebomb waiting to go off unless we take action now", Business Opinion, February 15th). He points out the need for urgent action – on auto-enrolment, funding the State pension and improving aspects of the private pensions system – and warns of the dangers of any further delays. He notes that the last government's pension roadmap points the way forward on several fronts and that, "since the analysis has been done", it is now time for action. And he challenges the notion that Covid-19 is a reason for further delays.
I couldn’t agree more. Especially on the issue of funding the State pension. In the 1990s, “the analysis was done” on this. It was clear that the cost was going to increase dramatically by the mid-2020s. That was why the National Pensions Reserve Fund (NPRF) was eventually set up in 2001. That fund was building up nicely in the early 2000s. But then came the “banking bombshell” in 2008. The NPRF was unceremoniously raided to bail-out the banks. What remained of it later was renamed the Strategic Investment Fund (SIF). This was then watered down again and became the “rainy day fund”, most of which has now been used up.
At this stage, funding the State pension is more urgent than ever and, like auto-enrolment, must not be further delayed. And what better time than now, while money is so cheap and people are paying the banks and credit unions to mind the money they’ve been saving during the pandemic. We are being warned that interest rates will not stay so low for much longer. Household savings are estimated at up to €14 billion. The Government could borrow cheaply to restart an NPRF and many households might be prepared to invest in a fund that was wisely, securely and sustainably invested for the benefit of future pensioners. So the time is now!
There was a time when I abhorred the use of the term “pensions timebomb”, foolishly believing that we had time to plan properly for future pensions. That time has long passed, and it’s time for urgent action to defuse the bomb, as Jerry Moriarty says. – Yours, etc,
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ROSHEEN
CALLENDER,
Blackrock,
Co Dublin.