Ireland’s pension system requires urgent reform - report
Ireland's pension system requires urgent reform to improve sustainability and protect the country’s aging population, according to a report from international pension’s group Mercer.
Ireland ranked 12 out of 30 countries in the 2017 Melbourne Mercer Global Pensions Index (MMGPI), and was awarded an overall B rating.
While the country’s pension system achieved high scores for both the adequacy of the expected benefits and the governance standards applied, the report questioned how well the system will be able to cope with proving sustainable income for people in the future.
Commenting on the report, Peter Burke, senior DC consultant at Mercer Ireland, said that the time was now right to develop a clear roadmap and timeline for the introduction of an auto-enrolment pension system for all employees
"As we are living longer and spending more time in retirement, this will help to ensure that the Irish pensions system can support the population in achieving adequately funded retirements," Mr Burke said.
According to research, less than half of Irish workers are currently saving in occupational pension schemes,
"In light of the pressures that this puts on the state pension and the €560bn pension savings gap that this country faces, it is imperative that the 2021 target for increasing coverage and levels of pension savings is met," Mr Burke said.
Denmark retained the top position in the index, which measures 30 countries and 60pc of the world's population, followed by the Netherlands and Australia.
Ireland ranked 12th out of 30 countries in this year’s index compared to 10th position out of 27 countries in 2016.
The country's overall rating improved from a C+ to a B, primarily due to the inclusion of a real economic growth indicator in the sustainability sub-index for 2017.
The report urged countries with unsustainable pension systems to take action now, rather than risk the need to take even more drastic action in the future.