This week has seen a series of warnings about pensions: the Society of Actuaries in Ireland has suggested that increasing the retirement age would be the most efficient way to cut the cost of state pensions; there have been warnings about the impact of benchmarking pay increases on public sector pensions; and a pensions conference heard how new funding rules and the poor performance of investment markets were putting pressure on many company pension schemes.
There are a number of related - but separate - issues in this mix. Broadly, one set of problems relates to how the exchequer will fund state pension payments and public sector pensions. The second relates to company pension schemes. About half of the defined benefit schemes in the Republic are technically insolvent, while those in defined contribution schemes are being warned that they should consider upping their payments if they want to ensure an adequate benefit level when they retire.
These problems must be faced, but not in a hasty or ill-judged way. In terms of the cost to the State, Ireland's age profile is one of the youngest in Europe. Many other EU states are already considering - or have already announced - increases in retirement age and/or extensions of the period for which employees must work to qualify for a full pension.
The Republic has more time to address this issue, with the burden really starting to rise after 2025. A start has been made through the establishment of the National Pensions Reserve Fund, but the actuaries' report suggests that this will not in itself go anywhere near solving the problem. Significant issues lie behind this debate, not least the level of taxation required to provide appropriate public services and pensions. As with the individual, the State will gain if it addresses this pensions question soon.
With regard to company pension schemes, employers, employees and pension trustees are facing difficulties. Nobody foresaw the prolonged fall in investment markets which has taken a heavy toll on fund values - the more recent recovery in the markets will help, but predicting future asset growth and thus judging the appropriate funding level for schemes is still difficult.
Clearly, consideration needs to be given to funding levels in many schemes to develop appropriate solutions to the current problems and thus protect benefits to members in so far as possible. However there is also a responsibility on the Pensions Board - which regulates the market - to take a reasonable approach as to the appropriate timescale and methods for returning funds to good health.