Pensions once again become a populist political football
Lack of backbone over necessary raising of pension age bodes ill for prospective coalition
The State pension age must surely rise. Photograph: iStock
Some 130 days after Ireland went to the polls, the State pension age became one of the very final issues to be resolved among the three parties hoping to form the next government. What started as an overtly populist campaigning strategy has become a central issue.
And even then, it appears the only way to resolve the impasse was to shuttle the issue forward to that most Irish of long-fingering chambers, a special commission.
Never mind that all available figures show the current State pension age, 66, will become unaffordable as a growing cohort of the population passes this point and lives for longer, supported by a smaller ratio of people in the working population.
Never mind, too, that the State already has to dig itself out of the financial hole created by the coronavirus shutdown of the economy and the money that will still be required to get it back to growth once more.
And that is before the cost involved in delivering the proposed programme for government, particularly some of the measures required to try to secure support from the wider Green Party.
A special commission will also probably put on hold – again – more fundamental reform of the pension sector. Specifically, further delay in the introduction of auto-enrolment – whereby workers are automatically enrolled in a private pension structure to try to ensure they avoid a poverty trap on retirement – seems inevitable.
Significant elements of the necessary reform of pensions – socially and financially – appear self-evident. As we age more healthily and many of us are able to remain in the workforce in some capacity for longer, the State pension age must surely rise. Whether we do that now or wait until pressure on the exchequer becomes extreme is a political choice, though it is our children or grandchildren who will pay the price.
For those who cannot continue to work, the Fine Gael proposal for the return of a retirement pension – payable from 65 but only to those without other private or work income – is imperfect but addresses a real need.
Finally, the introduction of auto-enrolment is essential as is facing down the pensions industry on some of its charging structures and on the need for clarity, transparency and the use of plain language.
It’s not that the parties don’t know what has to be done, it’s that they don’t have the political backbone to do it. And that bodes ill for the prospective coalition more generally in efforts to deliver responsible government.