Cantillon: Ictu swims against the tide on pensions

Most of the time, people refuse to engage at all on the issue of pensions. They don't understand them and, in any case, pensions are an issue that will not impact personally until too far in the future to demand attention.

Deep down, especially in this age of a defined-contribution pensions model, where there is no certainty as to outcome, they may simply not want to know an answer they fear will point to sharply reduced circumstances in retirement.

But, at least there is the bulwark of the State pension, yes? Well, maybe not.

And that’s when people who should know better exchange good sense for intemperate outbursts.


Several recent papers have raised issues about the long-term viability in its current form of the State pension. The bottom-line problem is that people are living longer. That means two things.

First a larger number of people will be drawing down the State pension for longer, adding to cost per head.

Second, as the demographic profile continues to bulge in later years, the ratio of people in work – ie paying PRSI contributions into the Social Insurance Fund from which the State pension is drawn – to those in retirement who are drawing from that fund, will fall.

There are also a generally agreed menu of approaches to address this: raise the age at which the pension starts being paid out; increase PRSI contributions; introduce a means test; or reduce the amount of the pension and/or the amount by which it is increased year to year.

Or at least generally agreed outside Ictu. The union movement, for its part, appears to be trying to deflect attention from the problem by attacking the messenger – in this case the actuaries whose job it is to crunch such numbers.

Ictu's Fergus Whelan last week railed against the "well-pensioned, self-selected few" who commission and then comment on reports calling for action on the State pension.

Whelan, who is the union groups’ pensions expert, accused them of having a “distasteful” ideological preference for private pension provision over public provision. Few answers, you’ll note, but plenty of cliched attack lines.

Ictu represents more than 560,000 workers, but many of those are public- sector members of blue-chip final salary/ defined-benefit pensions.

Adding to the clamour, Ictu general secretary Patricia King suggested Ireland's pension age should not be extended to 68 except as part of an EU-wide initiative.

King Canute comes to mind.