Fund 'was swallowed up to rescue failed banks'
Published 16/08/2016 | 02:30
Money that was put aside to pay for future pensions was swallowed up to rescue the banks.
The National Pensions Reserve Fund was put in place to pay for future State pensions and the pensions of public servants. But the head of the Irish Association of Pension Funds, Jerry Moriarty, said the State ended up raiding it to bail out the banks.
Mr Moriarty said that this left the Exchequer vulnerable, as the State pension is not funded in advance.
Instead, he said, the State is now using current taxation and current PRSI (pay related social insurance) contributions to pay for it.
"That's already running at a deficit," Mr Moriarty told Keelin Shanley on RTÉ Radio 1.
"We've got an ageing population, so we are going to have a lot more people relying on the State pension in the coming years and a lot fewer taxpayers."
The number of people in Ireland aged 65 and over will increase by almost 300,000 over the course of the next 10 years, from 570,000 in 2013 to 855,000 in 2026.
By 2055, just two people will be working to support every pensioner. This is down from about five today, according to Central Statistics Office projections.
Mr Moriarty added: "We had taken steps with the National Pensions Reserve Fund, where we were putting money aside. But that got used up to bail out the banks."
A report published in May concluded that the current State pension system is unsustainable.
Commissioned by the Society of Actuaries, it recommended cutting the pension payment, reducing future increases or restricting who qualifies for it.