Society of Actuaries says the State's pension system is unsustainable in its current form

mtk,

It is blindingly obvious that if we live longer ,pensions cost more .
I find it (amusing) when those on mega-pensions are only tweeked and constitutional issues preclude proper examination of them , yet there seems a nasty little subtle campaign to prime the normal work force to accept less and work longer?
We all can taste fairness; and unless the lead is clearly seen from the top, this pension time-bomb will catch us all.
Just moving pension age out longer is a bit unfair to those coming closer to (magical) 65 , now 66, soon to be 68.

Where does this adding on years end ? and it sends a poor signal ,in that it is a soft option.
It may be necessary but lets look.
I would fear that our usual Jellyfish Politicians will form committees to ensure decisions don,t affect election cycles !
 
Gerry Canning said:
mtk,

Where does this adding on years end ? and it sends a poor signal ,in that it is a soft option.
It may be necessary but lets look.
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Only if demographics would improve... so that means it will be open ended for quite a while. It happens in other countries as well so Ireland is no exception.
 
A problem with this country is that we want everything but don't want to pay for it. Look at what has happened with Irish Water and that was a pittance in compared to the cost of the Old Age Pension. Imagine if Kenny stood up and said that pensions are a massive problem and unless it was addressed, there will be huge issues in 15/20 years time. Therefore, he's increasing PRSI by 2% across the board. There'd be uproar. They'd then exempt people earning less than a certain amount (the people who probably benefit the most) and they'd lose seats. Given Kenny is on his last term in government, he couldn't give two hoots about pensions.

Fund your own pension (and that's not a plug! ;) )

Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
SBarrett said:
Fund your own pension (and that's not a plug! ;) )

Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
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I think this is the core of the issue Stephen. People who were responsible and funded their own pension or other retirement savings, will likely be means tested and lose at least part of the state contributory pension. This is coming like a steam train.
 
PRSI is 4% for employees in Ireland.

For your pension alone, just the pension, it's 9.35% PRSI in Germany.
 
Means testing should not be an option it's the least fair IMHO .

The German state pension is salary related afaik so no comparison.

Probable Future immigrant ( legal and illegal) in my view inflows make the standard projections unreliable . No need to get excited about this issue .
 
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JoeRoberts said:
I think this is the core of the issue Stephen. People who were responsible and funded their own pension or other retirement savings, will likely be means tested and lose at least part of the state contributory pension. This is coming like a steam train.
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Gordon Gekko said:
If you're providing for yourself, assume you will not get the State Pension.
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That is going to be very difficult to change. The old age pension is valued at c. €300,000. The value of the average pension fund is substantially lower than that. What will be done? Penalise people who have tiny pension funds? They won't be able to pay proportionate benefits, they can't link child benefit to income levels, there's no way they can do it for pensions. And how would they link the varying income of ARF holders?

If they did decide to do it, how would it be implemented? There will always be people who just fall short of the cut off point. Will they be able to deny someone who's been working for 35 years a €300,000 pension while someone who hasn't done a days work in his life gets one?

Then there is the political side. Old people protest and vote more than any other age group. If introducing means tests OAP as standard doesn't bring down the government, they will be out on their ear come the following election. We have seen the desperation of Kenny and FG to stay in power in the last few weeks. They will do what it takes to stay in power.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
I would agree with Steven on this, if you have contributed to the OAP all your working life it would be political suicide for a government to apply a means test to your entitlement, I think the only way they could do something like a means test for the OAP is pick a date and anybody born after that would be subject to the means test.
 
Cervelo said:
I would agree with Steven on this, if you have contributed to the OAP all your working life it would be political suicide for a government to apply a means test to your entitlement, I think the only way they could do something like a means test for the OAP is pick a date and anybody born after that would be subject to the means test.
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Not quite ?
Would it not be reasonable that that cohort who could afford to contribute and get 40% tax relief or played about with director type pensions, etc would after say a pension of 35,000 get means tested before receiving full contributory pension., .
I find it very irritating that Mr Noonan has already (stolen )from even small pension pots , so changes can be enacted but I fear its the little folk who will again be screwed .
For clarity , I do not think that those who saved for a reasonable private pension should be hammered but the cases where people just played the letter of the system maybe should take a hit . ?
 
Gordon Gekko said:
The average industrial wage is around €35k a year, yes?

That's €1,400 of PRSI per year from the employee and €3,800 from the employer.

€208,000 gets contributed over a 40 year career.

The pension is €12k a year, so 17 years before one is getting back more than one has put in.
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Gordon, I have to disagree with the highlighted parts, you are adding the employee and employer PRSI contribution and then stating that it takes 17 years before the employee gets back, what he put in.

He will put in 56k over 40 years, this covers a range of SW benefits including the contributory State pension.

Even if he claimed nothing for 40 years, the current yearly state pension (contributory) is 12,131.60, so it's 4 1/2 years on the State pension before he gets back what he puts in.

ppmeath
 
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