Friday 14 December 2018

Global index warning on Ireland's pensions

 

'The MMGPI, measuring 34 systems against more than 40 indicators, says the problem is compounded by Ireland's low level of pension coverage, with less than 50pc of the population currently participating in an occupational pension.' (stock picture)
'The MMGPI, measuring 34 systems against more than 40 indicators, says the problem is compounded by Ireland's low level of pension coverage, with less than 50pc of the population currently participating in an occupational pension.' (stock picture)
Dearbhail McDonald

Dearbhail McDonald

Ireland has been ranked 12th out of 34 countries in a global pension index, securing third place for the adequacy of its pension provisions.

However, the 2018 Melbourne Mercer Global Pension Index (MMGPI) has questioned the sustainability of Ireland's pensions regime as it grapples with a rapidly ageing population and a "comparatively generous state pension".

The MMGPI ranked Ireland, where the ratio of workers to pensioners is set to fall from 5:1 today to 2:1 by 2050, in 24th place - with a D rating - for sustainability.

The MMGPI, measuring 34 systems against more than 40 indicators, says the problem is compounded by Ireland's low level of pension coverage, with less than 50pc of the population currently participating in an occupational pension.

"Ireland's moderately respectable 12th position in the rankings does not tell the full story," said Danny Mansergh, head of member communications at Mercer in Ireland.

"The underlying truth is that Ireland provides a comparatively generous state pension, but also one that is set to come under serious fiscal strain as the population ages rapidly between now and 2050.

"The results of the 2018 Melbourne Mercer Global Pension Index provide a timely reminder that the planned introduction of auto-enrolment for 2022, if done correctly, has the potential to significantly improve the outlook for Irish retirees by reducing dependence on the State."

Irish Independent

Business Newsletter

Read the leading stories from the world of Business.

Also in Business