No matter how hard every Irish government tries to ignore the pension problems we have in this country, or to pass the parcel to the next administration, they simply won’t go away.
I attended at a major pension conference last week on the dire conditions of our state old age pension organised by the Society of Actuaries and the think-tank, PublicPolicy.ie. The most salient and ironic comment made was by the retired head of the Pensions Board (and PublicPolicy.ie director) Anne Maher who said, “If we had undertaken the pension reforms recommended in the late 1990s or in the 2000s, we would not be here today.”
I remember well the first major report which started being compiled in 1993, the ground breaking and seminal National Pensions Policy Initiative. It’s most notable achievement – years later – was the introduction of the Personal Retirement Savings Accounts (PRSAs).
Several other major studies have been rolled out since then, but the pension time ticks away, louder and faster. We are not the only country struggling to come to grips ageing populations and insufficient amount of funding. Back in 1993 we were in a perfect demographic position (with a very, very young population) so reform the old age pension, but 23 years later, we too are running out of road and now face a huge jump in the percentage of gross domestic product (GDP) needed over the next few decades if today’s young workers will see any benefit from their PRSI contributions.
Since this is the fourth article in our ‘Spring Clean/Declutter Your Finances’ series, you might want to know what kind of conclusions and recommendations were being bandied around at last week’s conference: three important reports were discussed, the substantive 2014 OECD Review of Pension Systems and two others, on Ireland, by the private consultants, Milliman and McKinsey.Get a cheaper Life Insurance quote now! or call Kieran@theinsurancedoctor.ie