Pensions bailout will be mother of all Namas
Ireland's pension crisis will dwarf the banking fiasco, so we must appoint a pensions minister now, says Daniel McConnell
God help anyone in the private sector who is retiring in the next few years. Far removed from the guaranteed Rolls Royce pension enjoyed by those in the employ of the State, employees in the so-called real economy face the threat of being left with nothing come the day they walk out of work for the last time.
In 2010, a majority of professional employees in their 50s and early 60s are on the old-school defined benefit (DB) pension scheme.
Under such plans, DB workers are supposed to get a guaranteed half to two-thirds of their final salary on retirement, but given the fact that over 80 per cent of pension funds in Ireland are now in deficit, coupled with the economic crisis and companies unable to plug the hole in the pension funds, there is real danger for many of those workers that their pensions will not be paid. It was this very issue that attracted so much controversy when SR Technics shut its doors at Dublin Airport last year.