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Friday 20 April 2018

Canny McCreevy saved for rainy day

Thomas Molloy

CHARLIE McCreevy is often remembered for his jaunty comment that if he had money, he would spend it.

In fact, the former Finance Minister was not adverse to saving and the National Pension Reserve Fund was one of his best innovations.

The fund has a reassuring name but it should really be called the Civil Servants' Pension Fund because its sole purpose is to save money to pay civil servant pensions.

At present, we operate a pay-as-you-go system which means public sector pensions are paid from taxes.

As the State began to employ more civil servants, Mr McCreevy believed it was prudent in 2001 to begin to save for the not-so-distant day when there would be a greater percentage of the population which was retired.

From the beginning, Mr McCreevy's deep scepticism about other politicians meant he went to great lengths to ensure that the fund could not be raided to pay for day-to-day spending before 2025.

He also gave control of the fund to the National Treasury Management Agency, which was much loved by the former Finance Minister.

However, Mr McCreevy's fears that a large pot of money would prove irresistible to his successors have been realised sooner than anybody suspected.

Irish Independent

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