Is postponement of State Pension Age inevitable

D

Duke of Marmalade

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I always bought into the conventional wisdom that because we are living longer we can't afford to pay the State pension from the same age (65).
The argument goes that when Bismark or whoever came up with the idea, folk of 65 only had about a decade left. But this is missing the point that our economic development has been enormous and unimaginable since those days.

I remember the talk of a leisure society on the back of the huge technological advances. That hasn't quite happened although Corbyn was mooting a 4 day week in UK Labour's manifesto. So an argument can be made that society can afford not only to maintain the 65 retirement age but even to reduce it without adversely affecting the standard of living of those at working age.

Of course even though society as a whole could afford longer retirement a situation where there is 2 workers for 1 pensioner could give rise to demands by the workforce for a bigger slice of the cake even if they are themselves enjoying more cake than ever due to economic growth.
 
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The problem is the unfairness Of the Irish PRSI system If you had a fair system I don't think you would have any backlash,
It was never reformed lots of loopholes in the system,
Reform pushed out because it would affect Vested interest Groups who would and should be paying away more into the system ,
Lots of vested Interest groups drawing out of the PRSI system down through the years having paid very little in,

Then you have people like Myself who started work at 15 ,lots of PAYE workers retiring now would have payed in from 16 to 66
without ever claiming anything back,
people who already payed in for 50 years being told they now have to work 52 year before the can get the state Contributory pension,

There are loads of loopholes put in the system ,
There are other loopholes that were supposed to be closed 25 year ago and were not Vested Interest Again,

The problem now is at 66 the people who paid very little /or for a short no of years are delighted to be getting so much per week in there Contributory pension,

The people who paid in all of there working life including Myself are happy with the amount received in Contributory pension But have a problem of fairness Driven by the fact the Government have money to pay people who only start paying in or signing on for PRSI credits in the last ten years Before pension age,
If the money is not going to be there Bring fairness in first then we can look at the pension age,

The whole system is in a right mess in 2010 I seen 19.75% of payroll stopped In PRSI today It is 14.75% + USC

Payroll stoppages PRSI +USC are lower in 2020 and they were in 2010 they are trying to find a way to take the Vested Interest Groups ,who never paid USC Before 2010 out and put the Burden back on PAYE Workers,
 
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As always with pensions, people leave it too late to do anything. People were told about these changes 8.5 years ago. There was awareness of it but most people decided to ignore it and only kick up a fuss when it impacted them.

The State doesn't tell you when to retire, they just tell you when you will start to receive the State pension. If you want to retire earlier, save the money yourself.

And the intention is for the State pension to be paid for the same amount of time for each generation so if we continue to live longer/ be kept alive by medical advances, you can expect the State pension to be paid out even later.

What can be done to reverse this? Pay more tax? The top rate is already 52% or 55% if self employed and earning over €100k. Should they pay even more tax? Or reduce other services. Where? Health? Education?

Or you can take responsibility for your own future and save some money for it.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
Well Steven,

"Let me be quite clear!!"...........in the leaders' debate d'other nite, Mary Lou (you know the one who's photo from 25 years ago is on all de posters) said that the Social Insurance Fund is currently over a billion in surplus - so I don't really see what the problem is here!

I heard a political commentator criticise her but it was clear he hadn't a clue. Firstly, he was trying to make out that there really is no Fund - imagine. Then he was going on about "sustainability" but that has nothing to do with pensions - that's to do with global warming and climate change and stuff. Then he was talking about demongraphics which is just bogeyman talk.
 
There is much talk about people who were manual workers probably not being fit enough to work after 66 through working continuously outdoors and difficult physical efforts. I don't think they should be forced to work beyond their 66th birthday. I reckon it is unsafe for them to do so. After a new government is formed I reckon the pension age will be 66 and probably written in stone.

Many of us were in unmanual jobs and worked indoors and therefore no adverse physical or mental problems occurred. There are people in this bracket who could work into their 70's without any fear or reduction of output. Except in specific circumstances people working in the Public/Civil service are obliged to retire at 65 (again there is talk of this being pushed out later).

A happy medium must be found where if anybody wishes to retire at 65/66 they can so do and receive the pension that they have contributed to. Furthermore, if people are in full physical and mental health they should be allowed to work longer if they so wish.
 

100% of public servants are in a pension scheme. 35% of private sector workers are in a pension scheme. If you are in a manual labour job your bones will be aching well before the age of 65. So you put away some money so you can stop working before the State tells you to retire.

Even if you just save enough for a couple of years OAP

Retire at 65 and receive Jobseekers - €205 a week for 12 months. Shortfall between that and OAP - €2,240
OAP equivalent for age 66 - €12,900
Total income to be saved - €15,140

If you start saving 10 years out and earn a return of 2% per annum, you need to save €26 a week to bridge that gap. For most working people, they can afford that. But they choose not to.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
elacsaplau said:
Firstly, he was trying to make out that there really is no Fund - imagine
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There is no fund - let me be clear - THERE IS NO FUND

This year's state pensions are paid from the money paid from the taxes and PRSI paid by those working this year
Currently there are 5 working people for each pensioner - so 5 peoples taxes/PRSI are available to pay 1 person's pension
In the foreseeable future, 2035, there will be 3 workers/pensioner and by 2050, only 2, per pensioner.
So either the pension will be reduced massively or taxes/PRSI will increase massively or some combination of both
 
jpd said:
There is no fund - let me be clear - THERE IS NO FUND
Click to expand...

JPD,

I'm just repeating what I heard on the radio and saw on the television. Are you somehow implying that Peggy Sue / Mary Lou might have been making things up? I thought that only certain posters on AAM did that!
 
jpd said:
There is no fund - let me be clear - THERE IS NO FUND
Click to expand...

The Social Insurance Fund is an accounting fiction.

It is not independently managed on an actuarial basis. There is no investment strategy. It simply pays out on an eligibility basis whatever rates are announced on budget day and legislated for soon after.

The Fund has existed since the 50s and to my knowledge has been in surplus for two brief periods: in the last few years and in the period just before the crash. The Exchequer is the residual financier. When the Fund is in deficit (ie, most of the time) the taxpayer bridges the gap - there is no reduction in benefits.
 
Leper said:
I'd love to hear a contestant in the general election coming out with this - Certain political death for him/her and the political party represented.
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True - to have any chance they'd need to double down on it and go into attack mode on all the other parties plans and explain why it has to be done to ensure there is money to pay out future pensioners. Seems like a more reasonable position to forego future increases than the disproportionate impact on those in the 65-68 gap when the state age was raised without doing anything about the contracts\rights of those affected.
 
I've said it before and I'll say it again... the gubberement want us to live forever - they don't want us smoking, drinking, eating unhealthily - but they don't want to pay the pensions, housing, etc costs of those long lifers. Can't make up their minds!
 

Those who started working at 18 in physical \ manual jobs should be assessed differently to those who started working in their 20s in sit down jobs after X years in college. I say that as someone who spent 4 years in college, had fees paid by government and works in a sit down job.

Need to look at accomodation of older people in the workforce \ gradual retirement, with 6 hour days or 4 day weeks.
That is, if we want 60 somethings to work and be productive, both for their own income\wealth and to reduce the burden on the state finances.
 
 

Would a free booze and nicotine allowance in lieu of both pension payment at 65, and any further increase in the current pension rate, be a win-win ?
 

But if we do that we should look at rates of payment or someone like me who will pay in two times in PRSI than I will ever draw down in a pension.

You can't have a flat-rate system without a universal retirement age.
 
What annoys me even more is the implication that older people are unable to work.

Ireland has made huge strides in employing older people in recent years (not that the media would ever notice).

55% of 60-64 year olds were in the labour force in 2019, up from 40% in 2004

12% of over-65s are in employment, up from 8% in 2004.
 
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