Why does the row over the future of Irish pensions matter so much?

Smart Money: High stakes in the big debate over our pensions and how they are paid for

There are signs of a big debate brewing, with a Department of Finance report published recently saying that the current policy was unsustainable. Photograph: iStock

There are signs of a big debate brewing, with a Department of Finance report published recently saying that the current policy was unsustainable. Photograph: iStock

Big decisions are coming on Irish pensions policy, with significant implications for the national finances and for people’s personal finances. A vital call will be what happens to the age at which people qualify for the State pension, currently 66 years of age. But there are a range of other policy changes which are also likely to be considered in this most politically sensitive of areas.

1. The age of retirement

The previous policy of gradually increasing the qualifying age for the State pension – referred to as the State pension age – was put on hold due to controversy before the last general election.The State pension age had increased from 65 to 66, but planned rises to 67 last January and to 68 by 2028 were put on hold, pending a study by a pensions commission. Its report is understood to recommend that any further increase be delayed for seven years, with a gradual rise in the State pension age to 67 in a series of incremental steps between 2028 and 2031 and an increase to 68 by 2039. However its full analysis of the cost implications of this and what other reforms are needed has not been published yet. There are also key issues relating to what happens with people’s employment contracts, many of which specify retirement at 65 years of age.

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