The Society of Actuaries in Ireland today called for an increase in the State pension to provide a higher minimum level of retirement income, rather than mandatory or “soft-mandatory” occupational pensions.
In its response to the Government’s Green Paper on Pensions, the society also recommended the State pension age be increased gradually to factor in extending life expectancy and to offset some of the extra costs arising if the State pension was increased.
The actuaries’ body also advised that reasonable advance notice of 15 years be given of any increase in State pension age and added this should be addressed as a priority.
Mr Philip Shier, President of the Society of Actuaries in Ireland, stated: “The society believes that gradually raising the retirement age is sensible in the context of the improvements in longevity that we continue to enjoy."
He noted that several other European countries have announced increases in retirement age to take account of increases in life expectancy.
“We also propose that individuals should be permitted to draw their State pension early at a reduced level, or to defer it if they continue to work after the State Pension Age and draw an increased pension from a later date.”
Mr Shier called for greater flexibility for occupational pension scheme members, saying they should be allowed to draw a pension while working part-time.
In terms of pensions security, the society sounded a warning note on benefits under private-sector, defined-benefit pension schemes, in which about 250,000 workers are promised a pension calculated as a proportion of their earnings.
The submission states that the current system “over-promises and under-funds”, and that scheme members are exposed to far greater risks than are commonly understood.
Ms Roz Briggs, who represents the Society of Actuaries on the Pensions Board, called for the regulatory approach to be changed to, at a minimum, provide increased transparency.
There are about six people working for every person aged over 65 Ireland, according to then-minister for Social and Family Affairs Martin Cullen. However, by the year 2050, that ratio is projected to be about two people working for every person over 65.
The deadline for submissions to the consultation process on the Government’s pensions Green Paper is May 31st. Mr Cullen said it is important that the Government receive the views of not only representative organisations but also those of the public on the issue.
