Oireachtas has ‘head in the sand’: Readers share views on pension age

A decision on the issue of the State pension age is expected to be made by the Government by the age of March.

The Oireachtas committee examining the recommendations of the Pensions Commission has said the qualifying age should not rise beyond 66. It also said mandatory retirement ages from work should be banned by law.

The committee’s view runs counter to the stance of the commission which argued the pension age should rise in steps to 67 by 2031 and then to 68 by 2039. The commission proposed to increase the qualifying age by three months every year from 2028.

We asked Irish Times readers to share their experiences on the issue.

Here are some of the responses we received. Some entries have been edited for length.

Robert Rigney

‘Increased retirement age will widen wealth gap’

I have paid PRSI contributions since the age of 15, specifically under a social contract that they were being accumulated towards a contributory pension. That’s why it called “contributory”.

At this stage I have over 37 years of contributions. By age 66, it will be 51 years of contributions. The Government chose to use these PRSI contributions for day-to-day spending instead of investing them to meet the commitment to funding my pension.

They are now advancing a narrative that somehow my pension will have to be paid for by the next generation. An increased retirement age will also further drive the retirement wealth gap between public servants and the general public.

Paul Galvin

‘Pension should be linked to PRSI contributions’

There should be a sliding scale either side of an agreed pension age. People retiring before 66 for example would get a reduce pension rate of say €20 less. They get €40 euro less at age 64 and so on. People retiring later would receive a higher rate.

This would allow people to plan for their retirement in a more flexible way. Overall the pension should be linked to PRSI contributions – fewer contributions receive a lower rate. In the future, PRSI will likely need to increase and the pension decrease. Clarity is key.

Mark L

‘People can retire whenever they want’

Of course the State pension age should increase in line with life expectancy. In the 1940s, 65-year-old men and 60-year-old women were eligible for the old age pension. This was at a time when life expectancy was also in the 60s.

Since then life expectancy has risen to above 80, but the age at which you become eligible has flatlined.

People forget that there is nothing stopping them retiring whenever they want – they just won’t be eligible for the State pension, which is only there as a social safety net to avoid destitution.

If people want an earlier retirement, or a more comfortable retirement they need to save for it. When I come to retire, I fully believe that there will be no meaningful State pension, hence why I am sacrificing things now. 

      State pension Q&A: Will we be obliged to work beyond age 66?

John Shannon

‘Completely unacceptable’

The State Pension is a Ponzi scheme. It is completely unsustainable – young people are paying into it in the false hope they will benefit. Shame on Sinn Féin for selling out the youth of today for votes now by pushing to lower the pension age.

Mairead

‘Committee has its head in the sand’

I agree with the commission’s proposals. The country has an aging population and like other western economies has to curtail the growing cost of State pension provision.

Politicians of all parties don’t want to tell voters the truth that the country cannot afford the existing pension arrangements and have prevaricated on an auto enrolment system that would help to reduce the burden.

The committee’s view is head in the sand and not wanting to say anything unpopular. Tax system should continue to encourage people to save for their own retirement. Most people have no idea how much it cost to fund a pension.

Diane Gough

‘More extreme steps could be required’

I’d like to know on what basis the Oireachtas committee has rejected the Pensions Commission findings? What is the point in getting experts to make recommendations if we then choose to ignore them?

I am concerned that if the pension deficit question isn’t addressed now, then at some point in the future, more extreme steps would be required to resolve the issues.

For example, only those without a private pension would get a State pension, despite a lifetime of contributions.

Theresa Ryan

‘More options needed’

I would rather see the age for full pension remain at 65 but with the option to take it from 62 at a lower rate or defer up to 70 to get a higher rate.

People should be allowed to keep contributing to PRSI. The contribution amount has no relation to benefit since the cap on annual PRSI was removed. This means those on higher pay are paying much more PRSI than if there was a cap.

There should be no exemption from PRSI for the lower paid – it is messy and the varying rates for employees and employers encourages gaming the system and keeping weekly pay below the threshold. Everyone pays in, everyone benefits.

Pat curran

‘Running away from reality not a good legacy’

Of course, the Government should have maintained their original plan. All the evidence points to the fact that at some time (not too long in the future) the pension bill will become unsustainable.

The key word is “future”. This is a magic word for politicians, allowing them to kick the issue down the road to a time when they no longer have to worry about re-election.

Of course the real problem here is that too many people have made no provision for their pension, expecting the State to look after them in old age.

It’s an admirable concept but not practical in a small country facing into a future where technology will reduce the number of unskilled jobs. Running away from reality is not a fair legacy for future generations who will have to deal with the repercussions.