The country faces a very serious private pension crisis by 2060 unless immediate action is taken to address deficiencies in the system, according to Fianna Fáil Spokesperson on Social Protection Willie O’Dea TD.
Deputy O’Dea was speaking at the launch of a Fianna Fáil discussion paper on Private Pension Schemes today.
“We need to start a mature debate in Ireland about how we will deal with the issues facing private pension schemes. At the moment; there are 6 people of working age for every person over the age of 65; by 2060 this will have changed dramatically to 2 people of working age for every person over 65.
“Proceeding as we are, with no responsible debate about how we plan for this future, is not sustainable. The discussion paper I am launching today is a genuine effort to kick start that debate.
“My paper looks at pension schemes under four different categories; pension scheme liabilities, the priority order, early access and pension charges.
“One possible way of saving some of the billions in pension schemes is to look at different ways of measuring liability and allowing greater flexibility in structuring benefits. Changing the priority order is also an option; at present if a pension schemes collapses people who are currently in receipt of the benefit receive their pension entitlements while those paying into the scheme will lose everything; there is merit in looking at changing this so those who have paid into their pension can have some recourse. Early access to pension entitlements would also enable people to draw down some of their pension before they reach 65; this may encourage more spending in the economy and stimulate growth.
“These are just some of the potential changes we can make to private pension schemes to make them more viable in the future. We in Fianna Fáil are open to other ideas on how to make the industry more sustainable, but the first step is for a mature and realistic discussion about the scale of the issue.”