Monday 18 December 2017

Pension crisis needs answers

MARY Hanafin, the Minister for Social Affairs, is expected to announce on Wednesday a change in the minimum age for a non-contributory State pension. Put simply, this means the raising of the qualifying age from the present 66 years.

The move will take nobody by surprise. There has been no shortage of signals and warnings about the world-wide pensions crisis or the specific attempts in Ireland to meet it. Now the crisis is upon us, on top of the burden of existing woes and gloomy forecasts. The Government cannot ignore it.

Private employers have already tried numerous remedies or partial remedies; for example, the Bank of Ireland's proposal to raise the qualifying age for its retiring employees to 68. It is questionable whether this or any of the other attempted remedies can meet the case fully. At a minimum, it has begun to appear likely that generous "defined benefit" schemes will become a thing of the past for new entrants to employment. IBEC, the employers' organisation, has called them a bottomless pit. Finance Minister Brian Lenihan, for his part, said in his Budget speech in December that a new scheme for the next generation of public servants would be announced this year.

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