While the dictionary definition of pensions is "a regular payment made by a government to people above a specified age", it is an issue that fills many people with dread. However, it is debateable as to whether the official definition will remain accurate for long. As the number of people drawing old-age pension grows, so does the burden on the State.
And with the proportion of working to retired people, which currently stands at four to one, expected to fall to one to one by the middle of the century, the burden is going to increase.
"People need to start saving for their retirement themselves and they need to do it as early as possible," says Anne Maher, chief executive of the Pensions Board. About 900,000 workers, or almost half the workforce, are not contributing to either an occupational scheme run by their employer or a personal pension sold by an insurance company.
You may think you are too young to be concerned with a pension - and for the time being you are probably right - but the predicted pension shortfall in years to come could have a severe impact on your life. While individuals who haven't made private retirement provisions can claim the State pension, provided they meet certain criteria, this luxury - albeit of only €193.30 a week, or just over €10,000 a year - may not be afforded you in your old age.
So what can be done? If you listen to the board, you need to start putting money away as soon as you start work. The sooner you start, the less you have to put away each month, says Maher.
However, it takes a lot of pestering to persuade us to do something we don't want to, especially when it means parting with hard-earned cash, something the board acknowledges. As a result, its annual campaign aimed at raising awareness of pensions has this year taken on a new dimension.
Its campaign will include outdoor, online, print, radio and television advertising, and its representatives will be at this summer's Oxegen and Electric Picnic music festivals to encourage young people to start a pension.
The message is clear: putting off saving for a pension scheme now could lead to financial ruin later in life. Research conducted by the board found that among those who don't contribute to any pension scheme, 21 per cent said they couldn't afford it, 20 per cent said they were too young to do so, and 12 per cent admitted they weren't interested in pensions. However, at the same time, four out of five people surveyed said the State pension wouldn't meet their needs in retirement.
The need to save for retirement and the general reluctance to take up the baton is something acknowledged by Minister for Social Affairs Séamus Brennan. Even with the generous tax incentives for pension savings and the ongoing public awareness campaign, the Government will struggle to meet its target of ensuring that 70 per cent of people over 30 have an occupational or private pension, he says.
As a result, he's asked the board to examine the options for mandatory pensions and how such a system would operate.
A recent survey by the Pensions Board found that two in three people believe it should be mandatory to start a private pension plan. In addition, 47 per cent of respondents said they would be willing to pay a higher rate of PRSI to provide for compulsory pensions, while 27 per cent of respondents who also had Special Savings Incentive Accounts (SSIA) said they would put all or part of it to a pension.
The Pensions Board must be doing something right, but awareness isn't enough, and unless the numbers start to increase soon, it may be too late. So make the most of your freedom now - I'm not telling you to think about retirement before you start work, but it never hurts to be prepared.
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