Increase in pension age will not proceed

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Purple said:
So the PRSI that Public Servants pay shouldn't be factored in when looking at the funding of their own State pension, is that what you are saying? If their PRSI contributions go towards their own pensions (which I assume they assume is the case) then that total amount has to be removed from your €6 billion figure.
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Public servants recruited since 1995 pay Class A PRSI and receive a contributory state pension. Their occupational DB pension is calculated as a value of final salary and then the contributory state pension is subtracted from it. This is what is known as "integration".

Otherwise you don't seem to know the policy or the numbers at all so I'm out.
 
So if l am reading you right, the 1 ÷80, times no of years, times salary = pension ... but then the OAP is deducted from that,,,

Does that still apply for cost neutral scenarios?
 
NoRegretsCoyote said:
Public servants recruited since 1995 pay Class A PRSI and receive a contributory state pension. Their occupational DB pension is calculated as a value of final salary and then the contributory state pension is subtracted from it. This is what is known as "integration".

Otherwise you don't seem to know the policy or the numbers at all so I'm out.
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I've linked to numerous sources which support my point and you've done a few back of the fag-packet calculations and I don't know the numbers? Yea, right.
Look at the CSO link I posted and look at the KPMG report I linked and you'll see that they treat State Employees as a different group when calculating the State Pension funding shortfall.
Just because you think something should be true that doesn't make it so.
 
NoRegretsCoyote said:
You didn't seem to know that employers PRSI existed.
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Ah I did. You've failed to address any of the facts. Instead you've pulled figures out of the air and made nebulous attacks on me.

Do you think your back of the fag packet figures are correct and the 200 page KPMG report which was done on behalf of the Department of Social Protection to investigate the issue that you don't seem to think exists is wrong?
 
@Purple

The social insurance system is pay as you go. The KPMG actuaries point out (correctly) that outgoings will exceed incomings in future even with the legislated-for increase in pension age, all on a PAYG basis. This is fine.

My point is that if you invested half of today's PRSI take every year you would just about fund the contributory state pension bill. Investment over the long term can be safely assumed to generate a positive return.
 
NoRegretsCoyote said:
@Purple

The social insurance system is pay as you go. The KPMG actuaries point out (correctly) that outgoings will exceed incomings in future even with the legislated-for increase in pension age, all on a PAYG basis. This is fine.

My point is that if you invested half of today's PRSI take every year you would just about fund the contributory state pension bill. Investment over the long term can be safely assumed to generate a positive return.
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Yes, we are all aware that the social insurance system is pay as you go. You're "point" would require at least an additional €5 billion to be raised each year to fund current liabilities, that pay as you go system, while investing the extra €5 billion. The pay as you go system is that we are dealing with so, as I've said from the start, people are paying PRSI to fund the existing pension liability rather than their own pension, a future liability which will be far larger than the current liability, so they are not paying anywhere near enough to fund their own pension.

Your point seems to be that if we stopped paying half the pensions now and used what we saved to fund future liabilities then there'd be enough money, as long as the projected changes in the dependency ratio and increases in life expectancy don't happen, as long at the future liability remains the same at it is now (even though it won't).
Is that what you are saying?
 
NoRegretsCoyote said:
@Purple

More or less. Except that the demographic changes wouldn't be as big an issue, because of pre-funding.
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Okay, so then it's fair to say that currently people aren't paying enough to fund their own pension which is the point I was making.

I agree that if we change the funding model and increase contributions significantly, your suggestion is a 50% increase, then we would be paying enough.

That is of course predicated on increasing the pension are to 67 and then 68 as was the plan before the government bottled it under populist pressure from the Child Killers and the fact that State Employees were not being treated the same.
 
The current funding of pensions certainly not sustainable in the long term.

The vast majority of workers do not want to work past 65. Yes many want the choice for a variety of reasons but certainly do not want it mandatory.

Most jobs are difficult to maintain at say 67yrs of age. Forget about the blocklayer or paddy the plasterer.
Do you want your mammy cleaning the toilets in the ilac centre at 67. Your father at the check out in Lidl at 66. Hairdresser cutting hair all day on their feet at 67. The vast majority of jobs out there would prove difficult for anyone in their mid to late sixties.

Purple regarding the shinners I would agree that Financial policies are pie in the sky. Thats why I could not vote for them. That said there TD,s are voted in like any other party. Its called a democracy. Regarding your reference to "child Killers" please name these child killers you refer to. Actually amazed moderators have not removed your comments.

The whole area around pensions is hugely complex and while we can model off other countries our demographic and population will determine how we proceed in the future.

Education is a key to the future. Most of our young people leaving secondary school or college might
have learnt about the the angle of the dangle........ Yet they have no grasp of the most basic financial issues that concern them now or into the future. Pension investments mortgages etc. They cant even work out what their take home pay would be if they secured a job.

Tiocfaith ar la (pension age 85)
 
The government should have brought in a measure to discontinue the accrual of pre 2013 (year of Single Scheme introduction) inflated public service pensions for public servants and move them to the single scheme for the rest of their careers. They could have let them keep their benefits to date but say from now on you will be subject to the single scheme benefits.
 
Its an interesting discussion. Certainly the funding issue is important and cannot be wished away. But also the the entire concept of a pension, providing a sufficient moderate lifestyle in retirement as working people enter into their latter years needs to be focused on, otherwise what is the point in saving for retirement if it means having to work longer?
I do fear, that once the genie is out of the bottle and the retirement age is increased to 67, then those 20 somethings starting out out will probably be facing into a retirement age of 70+.
This is particularly relevant where the mortality differentials in different socio-economic groupings is concerned. With those in the most deprived areas , working labour intensive or low-skilled jobs, having lower life-expectancy. I think in Britain there was a proposal to raise retirement age to 70, but was quickly binned when it was discovered that age 70 is in excess of the life expectancy of some of the most impoverished areas of Britain.

So is the resolution to move the retirement age to a later date, or to look at other ways of funding? My preference would be to look at other ways of funding. I cant say for certain, but my impression is that little has been done to explore more efficient ways of redistributing the cost. I think the age limit is a blunt instrument, and moving the age limit is a blunt response to a blunt instrument.

It has been mentioned in the course of this discussion that some people prefer to keep working. Part-time or full-time. Perhaps an option to defer the receipt of their State pension would be option? A carrot could be that they no longer contribute from their earnings, making their continued employment more attractive while simultaneously reducing the cost of the pension. Of if they continue to contribute, then their pension will be that little bit higher when they do decide to call it a day?

Another way, perhaps controversially, is knowing that while people are living longer that it also correlates with increasing levels of nursing for longer periods of time as peoples mental and physical faculties begin to deteriorate. Speaking from personal experience (I'm sure others can testify also), having watched an elderly relative live through a healthy and fulfilling retirement, there came a point when nursing, food, light, heat, and company, were the only things of real substance in this persons life. Is there a case to be made, when you add the allowances and the pension, that some or all the pension is diverted to the cost of healthcare? Is this not a more efficient use of resources rather than allowing the pension build up as some tidy inheritance pot?
 
I should add, there appears to be a train of thought that says if the value of social insurance contributions towards State pension equals x plus interest, that therefore the value of State pensions provided for should not exceed this amount.
While the PRSI contributions of working people are the primary resource for funding State pensions, they are by no means the exclusive resource for funding pensions. As we all know, wealth is generated in many ways and the State tends to find ways to extract a portion of that wealth to fund public and social services including State pensions.
A simple example would be where a company pays 12.5% CT of say, €10m.
There is nothing to stop the government diverting all, or a portion of this income to support State pensions. Add all the other income streams that the State has and there are many avenues for the State to support the funding of State pensions.
And of course, there is always borrowing. Not borrowing for the sake of borrowing, but one of the advantages of living in a developed, politically stable, economy, is the ability to borrow at cheaper rates than would otherwise be possible in other economies. While this is borrowing from the future to pay for the present, it should also be minded that it is this present that sustains our ability to borrow into the future. In other words, as long as the economy is producing wealth that is valued over and above what the value of what its borrowings are, long-term, then the pension deficit is not the 'time-bomb' that it is often perceived to be.
 
KOW said:
Regarding your reference to "child Killers" please name these child killers you refer to. Actually amazed moderators have not removed your comments.
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The parts is run from the UK by members of the IRA. The IRA murdered children. The public leadership of Sinn Fein regard those people as friends, colleagues and "good republicans" and are willing to break Covid19 restrictions to go to their funerals. Therefore I consider the term accurate.
 
WolfeTone said:
I should add, there appears to be a train of thought that says if the value of social insurance contributions towards State pension equals x plus interest, that therefore the value of State pensions provided for should not exceed this amount.
While the PRSI contributions of working people are the primary resource for funding State pensions, they are by no means the exclusive resource for funding pensions. As we all know, wealth is generated in many ways and the State tends to find ways to extract a portion of that wealth to fund public and social services including State pensions.
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The number of people drawing the State Pension will triple over the next 35 years. That's a fair bit of extra resources to extract, especially considering the many other resources that older people consume, health services being the main one. Those over 65 already consume over a third of all healthcare spending. In 35 years there will be twice as many of them per head of population.
 
KOW said:
Regarding your reference to "child Killers" please name these child killers you refer to. Actually amazed moderators have not removed your comments.
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No posting guideline has been offended.
 
Purple said:
The number of people drawing the State Pension will triple over the next 35 years. That's a fair bit of extra resources to extract,
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Yes, but it is not happening in a vacuum. The overall population increase, including the working population, is set to rise significantly also in that period.

Purple said:
Those over 65 already consume over a third of all healthcare spending. In 35 years there will be twice as many of them per head of population.
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Yes, and the those aged 80 or over will be the fastest growing grouping of that age group. Which returns me to my point above., 80yrs + is also the age level where deterioration of physical and mental faculties begin to signficantly increase. And in that context, would there not be scope to divert pension payments to healthcare costs where it is needed, considering, other consumption of other resources supported by the pension - travel, clothing, leisure, etc will have significantly dropped? Just a thought, thats all.
 
Yes the can was certainly kicked down the road this budget.
Forget about the shinners Purple. I canvassed for the local FF man and policy for the election was no increase in pension age. Something that came up on the door step over and over again.
Yes just raising the retirement age is a blunt instrument.
We live in a welfare state.
Would we end up exchanging one social welfare payment with another? Those who have no savings or have chosen to live a certain life style. People in poor health. People with a disability. All will be entitled to some sort of payment.
Would changes encourage people to not save or provide for themselves in old age.
Not picking out any career but just as a couple of examples. A member of the gardai pension would cost 1.8million for a private sector worker. A super in the gardai who might have salary of around 110k would have a pension of 55k and take home a tax free lump of 165k at age 60. There are well over 300k state employees now. The real ticking timebomb.
This in my opinion is where the problem lies.
At some stage down the road I think there will have to be the same basic pension for every worker and if one wants a better pension you pay for it.

Currently the whole system is a mess. One example a lower paid worker getting relief for contributing to his/her pension @20% while a higher earner gets 40% relief. Who struggles more to try and provide for themselves for the future? Why not 30% relief for every worker trying to do the right thing.

Hate to be starting out its depressing.
 
KOW said:
Not picking out any career but just as a couple of examples. A member of the gardai pension would cost 1.8million for a private sector worker. A super in the gardai who might have salary of around 110k would have a pension of 55k and take home a tax free lump of 165k at age 60. There are well over 300k state employees now. The real ticking timebomb.
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Tend to agree the OAP is not the issue as these are micky mouse (compared to other wealthy EU countries) . There are well over 300k state employees as mentioned above with I might add future pension in payment linked to increases in previous grade.
 
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