THIS country would need 4-million migrants over the next 30 years to maintain the financial health of the State pension system.
The stark warning was made to the Government-appointed Pensions Commission. It was told that the number of older people is rising fast, leaving a smaller proportion of those in work to fund the pensions of the over 65s.
Central Statistics Office statistician James Hegarty told a commission meeting: “The population of older age groups will increase, and this will have e a significant impact on the ratio of working age people to pensioners.”
He said at a meeting in December that there are currently five working age people to every one person over the age of 65.
By the year 2051 this will fall to 2.3 people for every one person over 65.
But Mr Hegarty said Ireland is still younger than most European countries. This is due to the fact that fertility rates have only started to drop here recently, while they have been falling in the rest of Europe for a number of years.
This country is moving to the EU average with more older people and fewer younger people, Mr Hegarty said.
“To maintain the current ratio of five workers to one older person in 2051, it is estimated that an additional 4 million migrants would be needed,” he told the commission.
But the statistician and commission members unlikely that net inward migration will reverse the current trends. And some migrants would become pensioners themselves.
“An additional 4 million migrants by 2051 would create significant challenges e.g. in terms of housing, transport, employment,” the minutes state.
The Irish Fiscal Advisory Council (FCA) told the commission that currently €850m a year is needed to cover pensions, and costs will grow substantially.
It is anticipated that expenditure will outstrip revenue by 2025, largely due to increasing costs for pensions and long-term care.
FAC chair Sebastian Barnes said tax and spending would have to adjust to fund pensions, while the pension age would need to rise.
Social Protection Minister Heather Humphreys spoke at the first meeting and made it clear that a reduction in the amount of State pension was not to be considered.
The Minister also emphasised the role of the State pension as the bedrock of the pension system and asked members to keep this in mind
The Commission on Pensions has been told to report by the end of next June on the qualifying age for the State pension, contribution rates, total contributions and eligibility requirements.
It comes after previous plans to increase the State pension age proved highly contentious during last February’s general election.
This prompted a commitment in the Coalition Government’s programme for government to maintain the pension age at 66 pending the completion of the Commission’s work.
The pension age had been due to go to 67 this month.
The commission has been asked to look at projected changes in demographics, and review the situation in other countries, among other considerations.
It has also been asked to examine how private sector employment contracts specifying retirement ages below the State pension age may impact on the State’s finances and pension system.