Borrowing to fund the state pension

National Pension Fund

As I understand it, a proportion of the NPF is invested in € bonds.


From a macro economic point of view this is ridiculous. The most economic way for the country to invest in bonds is to pay off the national debt.

The only winners out of this are the fund managers who get the mandate to invest in the bonds. :rolleyes

Re: Eppur si muove.

Galileo said

<!--EZCODE QUOTE START--><blockquote>Quote:<hr> Which of the three will have a financially secure retirement? <hr></blockquote><!--EZCODE QUOTE END-->

Gamma will have the most secure retirement.

Beta might not be that far behind. He will see that he is running a deficit which will show up in high borrowings and may well alter his behaviour.

Alpha is in the worst position, because he has no appreciation of the problem.

Brendan

National Pension Fund is actually counterproductive

Till now, my view was that the NPRF was a smoke and mirrors jobbie. Investing in assets whilst still having a National Debt - balance sheet bloating doing nothing really for bad or for worse.

Now I think it is actually psychologicaly counterproductive. We are already hearing demands from Labour and the IMO and others to spend the fund on more worthy immediate projects than future pensions and indeed these projects are more worthy.

If there was no such fund and instead we simply reduced our debt, there wouldn't be such an obvious target for greedy eyes. So, far from finishing up as a fund for pensions, it will become an ever increasing temptation to be put to more immediate and arguably more deserving use. This temptation would be very much less if we simply reduced the National Debt.

And another thing, what's all this about future Finance Ministers can't touch it. Is Ho Chi Quinn just bluffing - simple legislative change seems to be all that is needed. If they really wanted to make this Fund secure they should have had a Constitutional Amendment which says it can't be touched until 2030 and furthermore that, unlike other Amendments, it itself could not be overturned even by Referendum.:rolleyes

Re: National Pension Fund is actually counterproductive

Hi Troy

I agree with your criticisms of the Labour Party's attitude to the NPF.

But to be fair, I think that Fine Gael has a similar attitude.

And I think a FF led coalition government would probably raid it if they needed to.

Brendan