Sir, – Diarmaid Ferriter’s interesting review of some of the history of pensions is sadly misrepresented in the headline “Pension age fudge another reason for young to emigrate” (Opinion & Analysis, September 23rd). I found no mention of either fudge or emigration in his article; although he did, at the end, fall into today’s common trap of saying that the current proposals mean that the younger generation are being “burdened’” when they are already “severely disadvantaged”.
However, unlike most current commentators on this issue, Prof Ferriter alludes to the efforts made in the 1990s to “decommission the pensions timebomb”. At that time, in addition to the regular demographic projections and actuarial reviews carried out in relation to the State pension, two important commissions were set up by the “rainbow government”. Both strongly recommended the commencement of funding, one in relation to public service pensions and the other in relation to the social insurance pensions. And eventually, in 2001, the National Pensions Reserve Fund was set up, to smooth out the big bulge in pension costs that was predicted for the mid-2020s.
That fund, the NPRF, was building up nicely for a few years but was then raided to bail out the banks in the 2008-11 crisis. The remnants were called the Strategic Investment Fund. Then that was watered down into the “rainy day fund” and who knows what and where that is now.
No-one dares speak the words Pensions Reserve Fund.
However, the present Government must be credited with making a start on some of the important pension reforms that were recommended many years ago. It is planning to introduce auto-enrolment at last. And now they’re introducing some much-needed flexibility around retirement ages, which will enable more people to work beyond the State pension age of 66, if they want and are able to do so.
What’s needed now is for employers to respond by adjusting employment contracts that force people to retire at 65, as many still do. This often puts an extra cost on the State to support people until they reach 66. Ibec has already indicated agreement with this change.
Moving to a “total contributions system”, instead of the “yearly average”, will help more people to qualify for the full State pension, as will the suggested improvements for carers and some other groups; but more may need to be done in this regard.
It’s also vital, now, that instead of bemoaning the “ageing population” and the “burden” they’re placing on younger people, we start welcoming the “ageing workforce” and the contribution that older workers can make to society as a whole. Not only by working and reducing their dependence on the State, but by contributing positively to the coffers of the State, as well as to their own wellbeing.
Someone who works beyond 66, even part time or on reduced hours, will be contributing to the exchequer by way of tax, USC and probably, in the future, PRSI. They will be increasing their own wellbeing and in many cases contributing to society, not only financially. And it’s essential that future actuarial reviews and costings of the State pension take account of these positive developments associated with many people working longer. – Yours, etc,
ROSHEEN CALLENDER,
Blackrock,
Co Dublin.