Irish Pension System in Crisis

The Irish pension system is experiencing extreme difficulties. A recent study, the first since 2009, shows that the retirement age has risen dramatically and that many younger workers have small pensions or do not have their own pensions at all.

The Irish Times covers the issue in more depth:

Ireland’s pension crisis continues to deepen, with figures published on Monday showing that private pension provision is declining as the numbers set to depend on a state pension jump from 26 per cent in 2009 to 36 per cent in 2015. The decline in private pensions is most marked for millenials, with just a little over third having their own pension, while the self-employed are now likely to work for longer as their pension cover drops.

The figures, which were published on Monday as part of the Central Statistics Office Quarterly National Household Survey, give the first official update on pension provision since 2009. The survey was carried out among workers aged aged 20 to 69 years in the fourth quarter of 2015, and shows a significant decline in private pension provision, and an associated sharp rise in dependence on the state pension. The increase in reliance on the state pension will be of particular concern given the peak in funding costs of the payment as a result of demographics and the aging population.

[…]

Most worrying perhaps, is the low level of pension coverage among so-called “millenials”, with just 14.1 per cent of workers aged 20-24 years having a pension and just over one third (36%) of workers aged 25 to 34 years having one, down from 49 per cent in 2009. Pension coverage was greatest among workers aged 35-44 years, where total pension coverage was 55.3 per cent.

Self-employed people are less likely to have a private pension, at just 30 per cent, and of concern also, is that this figure is falling, down from 36 per cent in 2009 and 46 per cent in 2008.

Affordability (39%) and apathy (22%) were the two most common reasons for workers not having a pension, while some 70 per cent of workers with no occupational pension coverage stated that their employer does not offer a pension scheme. The most common sectors where the employer did not offer a pension scheme for employees were the construction (84%) and accommodation and food service activities (77%) sectors.

For more on the topic and for graphs of the study, visit the full article here.

 

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