The Government must act now to ensure that growing old in Ireland does not mean growing poor, a conference on the future of the State pension was told.
Justin Moran, head of advocacy at Age Action, said the Government needed to break out of the usual “one-term” thinking and start to plan for rising numbers of older people who will be entitled to a State pension over coming years. He said to focus only what was possible ahead of the next electoral cycle meant no meaningful strategic plan could be put in place.
The conference organised by the Society of Actuaries in Ireland, followed the publication last year of a report by Milliman which found that the State pension was unsustainable financially for the exchequer in the current form.
The authors of the report, Michael Culligan and Aisling Barrett, told the conference that options examined in their study for putting the State pensions system on a more sustainable footing included further increases in the retirement age, cuts in benefit levels (either in terms of the headline rate or the indexation rate), tightened eligibility criteria, increases in PRSI contributions, or a combination of these elements.
Sustainable
Alan Barrett, director of the Economic and Social Research Institute, said all analyses of the long-term sustainability of public pension systems show that spending on pensions as a percentage of GDP will rise in the coming years.
Whether that burden was sustainable or not, he said, it was clear that increases in labour participation at older ages will lower spending on pensions as a percentage of GDP.
Dr Barrett dismissed as myths the view that health issues limit the capacity of older people to work, that older workers are less productive or that keeping older workers in employment reduced job prospects for younger people.
