The Irish Times view on the pension age: change is unavoidable

Launching the report of the Commission on Pensions last October, Minister for Social Protection Heather Humphreys said it had "unambiguously established that the current State pension system is not sustainable into the future and that change is needed".

An Oireachtas committee tasked with examining the report and its recommendations has now delivered its own assessment. It puts forward a view that runs directly counter to the central recommendation of the commission – that the age at which people can access the State pension needs to rise over time. Instead, members of all political parties have signed off on a recommendation that the pension age should not rise at all from its current level of 66.

In addition, it suggests more benefits for those working over 66 and permitting an unlimited number of unpaid credited PRSI contributions to secure the highest pension possible. All of these are measures that involve extra cost for a system that, most people agree, will not be able to carry the strain of existing commitments indefinitely. Yet the committee argues against any increase in PRSI payments by employees to try to defray the extra cost of the State pension in coming years.

Its report acknowledges that “one of the reasons for the Commission recommending Package Four is that it seemed more equitable by asking all of society to contribute in a smaller way, rather than placing the responsibility to increase pension funding on one cohort of people”. But it then decides that all the financial burden for the escalating cost of State pensions should fall on employers and the self-employed by way of higher PRSI charges, the exchequer and some form of wealth tax. Ultimately, the more the exchequer is required to put into funding of State pensions, the less money that will be there for other things – including health and housing.

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The premise of the State pension – where today’s working generation pays the pension of preceding ones who have now retired – has always relied on the concept of social cohesion. Everybody accepts that they must trust the next generation to foot the bill as they have done. Social cohesion also suggests that where pain must be borne, it should be spread as fairly as possible across all stakeholders. Falling birth rates and significantly increased longevity mean there are already fewer people to foot the bill over a greater number of years for pensioners who are living longer.

With Government already under acute pressure on both housing and health policy, there’s a view that it, and politicians more widely, will not do anything to jeopardise the “grey vote”. For the sake of future generations – for our children and grandchildren – they need to. And, rather than do so grudgingly, they need to embrace it and deliver a positive message on why the best solution requires everyone to give a little.