New ‘compromise’ just the latest in long history of long-fingering pension reform

Reports suggest the State pension age will rise much more slowly than planned over a much longer period of time

The Irish Fiscal Advisory Council last year suggested deferring the State pension age increase to 67 last January would add up to €575m a year to annual spending, with the figure rising over time. Photograph: iStock

The Irish Fiscal Advisory Council last year suggested deferring the State pension age increase to 67 last January would add up to €575m a year to annual spending, with the figure rising over time. Photograph: iStock

Your Web Browser may be out of date. If you are using Internet Explorer 9, 10 or 11 our Audio player will not work properly.
For a better experience use Google Chrome, Firefox or Microsoft Edge.

 

It was probably inevitable but it is hard to take much comfort from reports that the State pension age will rise much more slowly than planned over a much more extended period of time.

The report of the State Pensions Commission – delivered to the Minister for Social Protection in recent days – is understood to recommend no change until 2028, with the State pension age rising by three months a year from then to hit 67 in 2031, and then by three months every two years, hitting 68 in 2039.

Given the competing voices on the commission and its genesis in political alarm over doorstep reaction during the last general election to the plan at that time for the age to rise to 67 in January of this year, such a “compromise” was always likely. But it is the just the latest in a long history of long-fingering pension reform.

The Irish Fiscal Advisory Council last year suggested deferring the State pension age increase to 67 last January would add up to €575 million a year to annual spending, with the figure rising over time. Failing to move to 68, as planned for 2028 at that time, would, it said, cost a further €1.5 billion

“Ireland,” it noted, “has a mixed history in addressing pension reform,with the pension age not having followed rising life expectancy and numerous official reports that have not led to change.”

While observers this week accepted the political requirement to “take small steps to change as big steps didn’t work”, they also confessed to “crossing fingers that it will happen at all”.

And aside from the cost implications, they pointed to the perils of disrupting Ireland’s social solidarity.

Pacifying today’s older workers at the cost of reassuring younger people about the long-term sustainability of the State pension risks triggering much the same political upheaval that Government parties currently fear is developing as a result of a housing market where an entire generation feels itself locked out of ownership.

If those in power entertain long-term hopes of remaining relevant politically, the time for idling may be coming to an end.

Business Today

Get the latest business news and commentarySIGN UP HERE
The Irish Times Logo
Commenting on The Irish Times has changed. To comment you must now be an Irish Times subscriber.
SUBSCRIBE
GO BACK
Error Image
The account details entered are not currently associated with an Irish Times subscription. Please subscribe to sign in to comment.
Comment Sign In

Forgot password?
The Irish Times Logo
Thank you
You should receive instructions for resetting your password. When you have reset your password, you can Sign In.
The Irish Times Logo
Please choose a screen name. This name will appear beside any comments you post. Your screen name should follow the standards set out in our community standards.
Screen Name Selection

Hello

Please choose a screen name. This name will appear beside any comments you post. Your screen name should follow the standards set out in our community standards.

The Irish Times Logo
Commenting on The Irish Times has changed. To comment you must now be an Irish Times subscriber.
SUBSCRIBE
Forgot Password
Please enter your email address so we can send you a link to reset your password.

Sign In

Your Comments
We reserve the right to remove any content at any time from this Community, including without limitation if it violates the Community Standards. We ask that you report content that you in good faith believe violates the above rules by clicking the Flag link next to the offending comment or by filling out this form. New comments are only accepted for 3 days from the date of publication.