The scale of the pension problem facing this State is best illustrated by just one of the many statistics contained in the National Pensions Review published yesterday.
There are, at present, four workers in the economy for every pensioner. In 20 years' time the ratio will be 2.7 workers and falling.
When you add in the fact that more than a half of the people currently working have no private pension provision, and thus will rely on the State pension in retirement, it is obvious that the system will struggle to cope and become an increasing burden on the Exchequer.
The solution, according to the Pension Board, is either to cut benefits or put up taxes to fund the State system adequately. Neither of these options is politically palatable or economically sensible. The alternative, and the one that the Government appears keen to progress, is to boost the numbers of people taking out private pensions.
Broadly speaking, there are two ways to achieve this. The first is to offer a range of attractive incentives and the second is to make it mandatory for all workers to take out a private pension. By definition, the first is expensive while the second smacks of the nanny state and is strongly opposed by business interests who fear they will bear much of the cost. The Pensions Board has left open the issue of mandatory pensions and homed in on incentives. It wants the introduction of pensions modelled on Special Savings Incentive Accounts which would have the twin effect of making the incentives - currently delivered via tax relief - more transparent and in the case of the lower paid, more generous.
These new-style pensions would also push up the cost of pension incentives which currently stand at €2.7 billion a year. Not surprisingly, the Minister for Social and Family Affairs kicked for touch yesterday, saying he wanted to see the issues thrashed out in a soon to be convened national forum and in the negotiations for the next partnership agreement. He also stressed the need for a full cost-benefit analysis and pointed out that incentives alone will not solve the problem. More tellingly, he has asked the board to look again at mandatory pensions, although the preference would appear to be for soft mandatory schemes which allow workers opt out if they wish.
Mr Brennan and his Government colleagues appear to be some way off from deciding what they want to do. By prevaricating they run the risk of missing out on the positive attitude towards saving engendered by the SSIAs, which start to unwind this year.
That said, the fundamental and far-reaching consequences of what is envisaged call for caution. The extent of the problem is not such that waiting another six months or a year would have catastrophic consequences. A delay of any longer, however, would indicate that a reluctance to take difficult decisions is the issue, and not a prudent evaluation of differing options for what are expensive and fateful decisions affecting millions of citizens over the next generation.