Good IT article: "Five ways your State pension benefits may be cut..."

[Merowig]

I don't know what we're talking about any more - you proposed that those that have children have a lower threshold to save for their retirement and this be part of a state programme. This is driven on the basis that these children will be taxpayers of the future and will fund the state coffers, including funds for pensions/care of the elderly. I was saying that continuing to rely on the next generation to meet our retirement needs is a ponzi scheme that multiplies the issue up until it is not possible to continue this approach through resource limitations - whether than be on a national or global scale. Trying to keep the low/middle segments of a population pyramid wider than older ages is unsustainable. I don't see any need for incentivising people to have children but instead that the resources of the taxpayers today are put towards their retirement.

No doubt there would be criticism of this in the future where the older generations are seen to be 'hogging all the wealth' but the alternative is they have no wealth and the young provide for their older generations in their working lives, which is what we have now and will continue to have until we make some fairly significant changes.

I wasn't speaking of an apocalypse but a continuing constraining of resource availability as human population and materials demand continues. We're there already and yet we're adding to the problem by denying its existence ('climate change is a myth') or preparing half-arsed ideas ('the population of the planet could live in Australia with enough land to feed them').

The pronatalist Government incentives are working - is anyone claiming that we don't have a high enough birth rate here or in (say) Britain? We can all pick out countries that meet our argument but we have to get away from the mindset that we need more children/future taxpayers in order to have state provision for pensioners.

The only alternative then in the longterm is to abolish the state pension pension completely - and everyone is saving then. It is now a ponzi scheme as a promise of money later in life is made - though there won't be enough people to finance that promise.
As said - the aim is to stabilise a population (2.1). Thats the reasoning also behind reducing mandatory savings for private pension (and increasing access to already made savings) by a third after each child with that proposal.

How would the "fertility" theory work in a country that had large emigration and insignificant immigration?

Hungary is exact in that situation - large emigration - non existing immigration. Fertility rate is 1.34.

So Hungary is here really "desperate" - after the third child you receive 32k in Euro (10 million Forinth - the average detached house price in Hungary is HUF 9.3 million) and you can get a cheap loan for additional 32k from the government.

With very large emigration the state pension is even faster doomed.

 

[Sophrosyne]

My point is really that in a country, such as Hungary, what does the fertility rate matter, if the young emigrate? The country will not benefit from their presence.

Therefore, linking pension systems to fertility does not work everywhere.

 

[Merowig]

Hungary had one bigger emmigration wave in 1990 (Romania had 4 waves - 1991, 2002, 2007/2008 2013/2014) - its not a permanent mass exodus - e.g. I have a Hungarian friend who worked here for many years in Dublin - and is now back for 4 years in Hungary.
A lot of Polish friends and colleagues also went back to Poland in the last couple of years.
Similiar to Romanians - new Romanians are still arriving in Ireland but I know as well of some who returned already or are planning to return.

According to a study after 10 years more than 50% of the immigrants returned back to their home country - after 25 years the number is up to 75%
[broken link removed] - though its in German.

I am here myself for many years - but I don't want to settle here and will for sure leave.
Within Europe the inner European migration is not permanent - but more similiar to long distance commuting - where people are moving for couple of years abroad - but visit their home country weekly/monthly/several times per year.

European migration to North America and Australia is more of permanent nature - migration of Europeans within Europe is in the majority of cases temporary.

 

[Sarenco]

It seems to me that there is a world of difference between offering an incentive to couples to have more children in circumstances where a country's fertility rates drop dramatically and penalising retirees if they have not procreated, for whatever reason.

The more I think about it the more I am convinced that your proposal would either be ineffective or, if it was effective, would actually exacerbate the problem that we are trying to solve for in the medium term.

And that's before we even start to consider the ethical implications of penalising people for their failure to breed. I take some comfort from the fact that no country has adopted your proposal and apparently none plan to do so.

I also don't accept your view that this is a binary decision - accept your proposal or jettison any notion of social solidarity in providing for our old age.

I fully accept that the situation is challenging but I disagree that the position is beyond saving by adopting an appropriate combination of the options already outlined.

However, I think we can agree that time is of the essence here - this issue cannot simply be put on the long finger or it will become unmanageable.

 

[Merowig]

State Pensions and demographics are strongly connected - any attempt to solve the problem has to solve the negative incentive on children. As already stated - cutting the pension amount, increasing contribution rates and retirement age will only buy some additional time but not solve the problem.

As again already written previously: something similiar is under consideration in Hungary:
Hungarian Article via google translate https://translate.google.com/transl...that_a_Nepesedesi_Kerekasz&edit-text=&act=url
and under discussion in Germany [broken link removed]

You can still find it presumptuous but I believe the rocks of economic realities are strong enough to smash any ideologies or "ethical concerns".
Though you are right - this won't be something to be seen in the near future - as most politicians lack the courage to do the necessary reforms. A lot of water will flow under the bridge till action will be taken. Though in my opinion the politicians who are not acting are culpable towards the future of the people...

And for Ireland this is much less of an emergency than for many other European countries due to the higher fertility rate here in comparison to the main land.


On a seperate note / slightly different topic - does anyone know what the impact will be on the Irish economy (if any) that immigrants (like myself) will be eligibale for Irish pensions - but will retire outside of the republic and so the money won't flow back into the local economy?

 

[Sophrosyne]

European migration to North America and Australia is of a more permanent nature

Ireland has an emigration propensity to the US, Canada and Australia - in Europe, mostly to the UK.

Demographics is not just about fertility.

Fertility and mortality are perhaps easier to estimate, but emigration and immigration are less predictable.

Emigration and immigration are influenced very much by the state of a nation’s economy at points in time.

Similarly, in the fertility theory, we cannot take for granted that all children will be economically productive in their own country. This may not be possible due to poor economic performance and may spend significant portions of their lives on welfare or in the black economy.

A one size fits all solution takes no account of economic differences.

On a seperate note / slightly different topic - does anyone know what the impact will be on the Irish economy (if any) that immigrants (like myself) will be eligibale for Irish pensions - but will retire outside of the republic and so the money won't flow back into the local economy?

Yes, you are correct in that many retirees, including Irish ex-pats, who live abroad, qualify for an Irish State pension.

There is also the fact that many returning ex-pats and others intend to retire rather than work here.

I am sure that the Social Protection Department would have the appropriate statistics.

 

[Sarenco]

I don't think anybody has sought to argue that the viability of State pension arrangements and demographics are not strongly connected. Where we disagree relates to your proposed solution to this problem.

The views of the ever entertaining Professor Sinn do not necessarily correspond with any mainstream political views in Germany. There has certainly has been no governmental policy to adopt anything along the lines of your proposal.

Can you address the concerns expressed elsewhere on this thread that your proposal will either be ineffective or, if it is effective, will actually exacerbate the problem we are trying to solve for in the longer term?

Beyond simply declaring that any combination of the proposed options previously outlined will only buy time, could you actially explain your position with reference to our demographic projections? I don't agree with your conclusion in this regard having considered the current projections but I would be interested to read how you arrived at a different position.

It has already been pointed out that factors other than fertility rates impact our demographics. You now seem to be acknowledging that point.

Ultimately what matters is the ratio of workers to pensioners and the productivity of those workers at any given point in time. The fertility rate is obviously highly relevant in this regard but it is not the full story.

 

[Cervelo]

On a seperate note / slightly different topic - does anyone know what the impact will be on the Irish economy (if any) that immigrants (like myself) will be eligibale for Irish pensions - but will retire outside of the republic and so the money won't flow back into the local economy?

How will the state pension eligibility changes proposed for 2020 have an effect on immigrants ??
From Citizens info
"The main change proposed was the introduction of a total contributions approach to replace the current yearly averaging system. This means that the amount of pension paid to you would be directly proportionate to the number of social insurance contributions and/or credits you have made over your working life."

 

[trasneoir]

I hadn't noticed that the irish times' headlines had become so clickbaitey. pity.

 

[Gerry Canning]

rob-oyle,
With slowing population growth and better land/water management I think we are on the cusp of an environmental revolution and most of it will be positive.
There is an acceptance that un-regulated gung ho growth is in its present form unsustainable.I believe that we now have the knowledge and political will to not foul up our world.
...........................................................................................................
On pensions.
A lot is spoken about average life increasing from 48 to circa 78 . Is that statistic not confusing.?
1. Infant mortality skewed life expectancy, if you lived past 16 you had a good chance of going well past 48.
2. So in reality we had a larger cohort of older people than appears from looking at bald %,s.
3. Economically ,Children dieing young, sucked a lot of resources in their young lives without them contributing.
4. Maybe more pensioners will be offset by (savings) ? on less children?
5. From posters, I do agree ,funding/provision should start now , for everyone.

 

[rob oyle]

Hi Gerry, I don't share your optimism. I see little in the trends that would lead me to believe that anything other than a material deterioration in the economic and ecological environments will occur the coming decades.

...

OK, now shorter sentences. As long as populations continue to grow and reserves continue to decrease, the ultimate destination will be resource exhaustion. And yet Western economies are built on the principle of growth outpacing inflation and infinite population growth to support the welfare of those too young or old to care for themselves. This is exacerbated by the wish of those in developing countries for the same lifestyle that we have. China has gone through the industrial revolution in a fraction of the time that we did 150-odd years ago. And who are we to deny them - much as we blame them for the environmental ills of today? The Chinese are experiencing the same pension-funding issues as in the West are but everywhere the solution seems to be - we need more babies!!!! This is the very nature of a ponzi scheme - if more don't buy in then the system collapses.

As much as we can do with science, there are limits to what can be done without exploiting further where we haven't already and even that only extends the deadline while causing untold damage. And the pronatalist incentivisation continues unabated with no end goal in sight.

We need radical pension reform but other than a couple of short lines put out by ReNua (which weren't correct to start with) in their election material, it would appear that it's not an issue for us and so the status quo continues...

 

[AlbacoreA]

I'm confused. Did something happen about pensions or natural resources.

 

[Merowig]

I don't think anybody has sought to argue that the viability of State pension arrangements and demographics are not strongly connected. Where we disagree relates to your proposed solution to this problem.

The views of the ever entertaining Professor Sinn do not necessarily correspond with any mainstream political views in Germany. There has certainly has been no governmental policy to adopt anything along the lines of your proposal.

Can you address the concerns expressed elsewhere on this thread that your proposal will either be ineffective or, if it is effective, will actually exacerbate the problem we are trying to solve for in the longer term?

Beyond simply declaring that any combination of the proposed options previously outlined will only buy time, could you actially explain your position with reference to our demographic projections? I don't agree with your conclusion in this regard having considered the current projections but I would be interested to read how you arrived at a different position.

It has already been pointed out that factors other than fertility rates impact our demographics. You now seem to be acknowledging that point.

Ultimately what matters is the ratio of workers to pensioners and the productivity of those workers at any given point in time. The fertility rate is obviously highly relevant in this regard but it is not the full story.

The discussion is moving in circles. Sinn admits himself that it will take a lot of time till politicians will have the necessary courage. Meanwhile in Germany some politicians started now just very recently to propose to increase the pensions and also to abolish the private pension part (Riester Rente).
Time will tell - myself am quite convinced that linking state pension to the amount of children with increasing the private pension is the way to go. we will have to agree in disagreeing. Economic Reality will beat ideology in the longterm

 

[animaal]

The fairest thing to do would be to look at what arrangements are sustainable in the long term, and implement those now. Give people clarity on where they're going to stand.

But how will the government(s) handle the situation?

I think the baby-boomer generation will be protected. The tab can be picked up by future generations.

When the time comes, the prudent will be sacrificed for those who haven't acted wisely - in the same way that today's contributory pension is worth pretty much the same as the non-contributory pension. Those who have a private pension arrangement won't get a state pension (currently costs approx. 300k to replace).

So who wants to pay PRSI & USC on additional pension contributions now, into a fund that can be raided by the government at any time, when the eventual income generated will also be fully subjected to tax and may be used as an excuse to deny you the state pension?

I honestly hope I'm just being cynical.