explain the need for a pension age extension...

Stovepipe · 26-01-2020 1:32am #1

Can anyone explain why, in an intelligent fashion,why the pension age has to be pushed out to 68? I'm of the opinion that the Govt are only doing so because Europe or the Troika told them to do so, while protecting pension rights for more expensive workers like the Germans or French? Why should we tolerate the pension mess?

blindside88 · 26-01-2020 1:34am

I’m not fan of the age increase but I would imagine the rational is to do with increased life expectancy. Look at the average life expectancy when the old age pension was introduced compared to today.

wmahcm · 26-01-2020 1:36am

People are now living too long and are much harder to control and manipulate if they have time and an independent source of income. The older and wiser are also harder to fool and brainwash.

4068ac1elhodqr · 26-01-2020 1:37am

The French didn't agree with such proposed age rises, and so have now theirs reduced down to 64.

Nijmegen · 26-01-2020 1:41am

People are living longer and having fewer children. Today there are five people of working age to support every person over 65. By 2036 it will be half that. Between 2007 and 2018 spending on the state pension has already doubled to €5bn per year. The emotional arguments about it can’t really get ahead of the fact that demography has baked in huge increases in pension spending that are unaffordable. Pensioners and near pensioners vote today. But if we kick the can down the road, working age people whose kids can’t get into a decent school because all the money is going into pensions (as it’s a pay as we go system, you don’t really really pay into a savings account for your state pension) might vote to screw them in their dotage. Better to face facts now and also push people to save more themselves for their retirements.

http://publicpolicy.ie/papers/irish-public-pension-system-expenditure-trends-and-recipient-numbers/

https://twitter.com/danobrien20/status/1221069810001481728?s=21

Pawwed Rig · 26-01-2020 1:41am

If they stopped raising it every year to buy votes it wouldn't need an age increase. At the end of the day it comes down to cost. The govt is not able to deal with the money we give them in any kind of efficient manner so wastage has to be absorbed somewhere

ILoveYourVibes · 26-01-2020 1:42am

Stovepipe wrote: »

Can anyone explain why, in an intelligent fashion,why the pension age has to be pushed out to 68? I'm of the opinion that the Govt are only doing so because Europe or the Troika told them to do so, while protecting pension rights for more expensive workers like the Germans or French? Why should we tolerate the pension mess?

We shouldn't.

wmahcm · 26-01-2020 1:44am

Pawwed Rig wrote: »

If they stopped raising it every year to buy votes it wouldn't need an age increase. At the end of the day it comes down to cost. The govt is not able to deal with the money we give them in any kind of efficient manner so wastage has to be absorbed somewhere

Irish governments always have and always will waste money.

Do you really believe the contributory state pension is one of the worst wastage's ?

suicide_circus · 26-01-2020 1:58am

Samara Bumpy Storybook wrote: »

The French didn't agree with such proposed age rises, and so have now theirs reduced down to 64.

and they will pay for it in the long run. no one likes the age increase but as i have stated in other threads, i have been in some kind of employment for the last 20 years and i have known for most of it that i wont see any state pension before i'm 70. increased life expectancy has a trade off, nothing is 100% positive.

Pawwed Rig · 26-01-2020 2:00am

wmahcm wrote: »

Irish governments always have and always will waste money.

Do you really believe the contributory state pension is one of the worst wastage's ?

God no. The HSE is by far the biggest waste. Raising the age of the pension though absorbs some of that waste

wmahcm · 26-01-2020 2:04am

Pawwed Rig wrote: »

God no. The HSE is by far the biggest waste. Raising the age of the pension though absorbs some of that waste

So you think a good solution to HSE wastage is raising the contributory state pension age ?
Sorry . . I'm not really seeing the logic here.

Stovepipe · 26-01-2020 2:04am

Right now, the death rate is 6.4 per 1000 and the birth rate is 12.5 per 1000, so we appear to be replacing ourselves at an approximate 2 for 1 rate, which means that potentially, we will put away more for pensions than we will consume. Also, the average life expectancy for men is 80 and women 82, so that gives 15 and 17 years respectively after an aged-65 retirement. Quite how, after paying a pension for 40 years, a person taking 15 years worth and then dying is a drain on the system is beyond me, especially if their pension is contributory, which is less of a burden on the State. Perhaps if the State allowed ordinary people to put more funds into a pension pot, like the American 401 (k), then there would be less of an alleged burden on the State.

Jurgen Klopp · 26-01-2020 2:07am

I mean what was life expectancy when it brought in at 65? They usually didn't expect most men to live last 73 or something wasn't it?

Unfortunately like it or not it will have to increase. I'm only 30 and expect to be kept going until 75

I don't know why they don't just create legislation saying it's illegal to make people retire before 68 then amend it each time it's changed

The real worry I have is with the amount of people trapped renting now and no hope of owning their own home where's all this future HAP and rent allowance going to come from?

Nijmegen · 26-01-2020 2:09am

Stovepipe wrote: »

Right now, the death rate is 6.4 per 1000 and the birth rate is 12.5 per 1000, so we appear to be replacing ourselves at an approximate 2 for 1 rate, which means that potentially, we will put away more for pensions than we will consume. Also, the average life expectancy for men is 80 and women 82, so that gives 15 and 17 years respectively after an aged-65 retirement. Quite how, after paying a pension for 40 years, a person taking 15 years worth and then dying is a drain on the system is beyond me, especially if their pension is contributory, which is less of a burden on the State. Perhaps if the State allowed ordinary people to put more funds into a pension pot, like the American 401 (k), then there would be less of an alleged burden on the State.

The state pension is not backed by a fund in your name. Your PRSI contributions mostly go out as they go in. So what matters is how many working age people there will be for pensioners in 15 years. That number will be half what it is today per the CSO models on it.

As for allowing people to contribute more to their pensions, tax relief is available up to €115,000 per year of income on contributions ranging from 15% in your 20s to 40% in your 60s. Not sure how much more generous the state could be in not taxing money you decide to save for yourself for retirement.

wmahcm · 26-01-2020 2:11am

Jurgen Klopp wrote: »

Unfortunately like it or not it will have to increase. I'm only 30 and expect to be kept going until 75

I wouldn't worry about it, there won't be a contributory state pension by the time you retire. The ever increasing indoctrination of ageism into Irish society will ensure it has been phased out long before then.

Nijmegen · 26-01-2020 2:11am

Jurgen Klopp wrote: »

I mean what was life expectancy when it brought in at 65? They usually didn't expect most men to live last 73 or something wasn't it?

The pension came in in 1908, at age 65, and the average life expectancy was about 59.

Stovepipe · 26-01-2020 2:15am

suicide_circus wrote: »

and they will pay for it in the long run. no one likes the age increase but as i have stated in other threads, i have been in some kind of employment for the last 20 years and i have known for most of it that i wont see any state pension before i'm 70. increased life expectancy has a trade off, nothing is 100% positive.

The French problem is that there are quite a few ways to retire very early, especially if one is a civil servant. It wouldn't be unknown in France to retire at 55 on a substantial pension and lump sum. Also, French employment laws are very restrictive about paying pensions and about worker contributions and health care etc. Employers essentially have their hands tied behind their backs from day 1, so sacking wasters or someone gaming the system is very difficult. What has happened is that casual employment has grown enormously, so it's cash in hand and avoid taxes and paying pension subs and so the overall pension contributions have fallen hugely so France is in a financial bind. In Ireland, it used to be the case that gardai, soldiers and teachers could retire very early but that's essentially gone and dying out but not so in France and other European countries, which still have a lot of that kind of employment in large armies, large civil services and so on, and it's hitting the State pocket in these countries,as they dont want to give such rights to new workers, whosaw their parents get them and want the same.

wmahcm · 26-01-2020 2:18am

Stovepipe wrote: »

The French problem is that there are quite a few ways to retire very early, especially if one is a civil servant. It wouldn't be unknown in France to retire at 55 on a substantial pension and lump sum. Also, French employment laws are very restrictive about paying pensions and about worker contributions and health care etc. Employers essentially have their hands tied behind their backs from day 1, so sacking wasters or someone gaming the system is very difficult. What has happened is that casual employment has grown enormously, so it's cash in hand and avoid taxes and paying pension subs and so the overall pension contributions have fallen hugely so France is in a financial bind. In Ireland, it used to be the case that gardai, soldiers and teachers could retire very early but that's essentially gone and dying out but not so in France and other European countries, which still have a lot of that kind of employment in large armies, large civil services and so on, and it's hitting the State pocket in these countries,as they dont want to give such rights to new workers, whosaw their parents get them and want the same.

Whereas the likes of Ireland prefers to screw the worker and spend billions on those who never work and bankers and bondholders.

Stovepipe · 26-01-2020 2:22am

As for allowing people to contribute more to their pensions, tax relief is available up to €115,000 per year of income on contributions ranging from 15% in your 20s to 40% in your 60s. Not sure how much more generous the state could be in not taxing money you decide to save for yourself for retirement.[/QUOTE]
The thing is, in other countries, funds that you put away into a pension pot were safe from Govt pillaging,such as the American 401 (k), whereas, here and in the UK, the Govt have raided pension funds by taxing them or imposing restrictive conditions on them.

Stovepipe · 26-01-2020 2:26am

wmahcm wrote: »

Whereas the likes of Ireland prefers to screw the worker and spend billions on those who never work and bankers and bondholders.

Contrary to popular opinion, some bondholders were burned but were hit only to the order of 70 c/Euro,ie, they got most of their money back. A Canadian fund manager was reported as stating that he expected to lose his shirt on Irish bonds and was thrilled to get between 70 and 85 c back. He was insured up to the hilt anyway and effectively lost nothing, yet we got to pay for it, as if they had lost all of their funds.

wmahcm · 26-01-2020 2:32am

Stovepipe wrote: »

Contrary to popular opinion, some bondholders were burned but were hit only to the order of 70 c/Euro,ie, they got most of their money back. A Canadian fund manager was reported as stating that he expected to lose his shirt on Irish bonds and was thrilled to get between 70 and 85 c back. He was insured up to the hilt anyway and effectively lost nothing, yet we got to pay for it, as if they had lost all of their funds.

And yet ordinary workers complain about other ordinary workers in the EU being the problem. Turkey's really do vote for Christmas it seems.

Pawwed Rig · 26-01-2020 7:18am

wmahcm wrote: »

So you think a good solution to HSE wastage is raising the contributory state pension age ?
Sorry . . I'm not really seeing the logic here.

Huh?? Where did I say that?

NIMAN · 26-01-2020 7:26am

Did you know that 65 was picked as a retirement age ...... in 1880.

I think times have changed since.

twowheelsonly · 26-01-2020 7:55am

Nijmegen wrote: »

People are living longer and having fewer children. Today there are five people of working age to support every person over 65. By 2036 it will be half that. Between 2007 and 2018 spending on the state pension has already doubled to €5bn per year. The emotional arguments about it can’t really get ahead.....

What is the comparative tax take for the government in the same time frame though ?
USC alone raises 4 to 5 billion per year with the Pension Levy raising another Billion or so. They're taxes that we didn't have in 2007.

Emmersonn · 26-01-2020 8:02am

ILoveYourVibes wrote: »

We shouldn't.

But we will, simply because we are told to . Unlike the French who are protesting. The only Irish people with some backbone are the farmers and these are being cast out by anyone who is in their own mind and importance are being in the least bit inconvenienced. It's a case of Fcuk you Jack, I'm alright.

timetogo1 · 26-01-2020 8:06am

Pension all over needs a reform.
In my job an ex Gardai has joined. He's retired in his 50s (he had a cyber job so not pounding the streets) and is getting half of his Gardai wages now as pension.
This is on top of the wages he's getting for working.

His biggest complaint is the tax.

26-01-2020 8:09am

Emmersonn wrote: »

But we will, simply because we are told to . Unlike the French who are protesting. The only Irish people with some backbone are the farmers and these are being cast out by anyone who is in their own mind and importance are being in the least bit inconvenienced. It's a case of Fcuk you Jack, I'm alright.

Weren't all the migrants going to solve this issue?

893bet · 26-01-2020 9:40am

I am building a small private pension. Hopefully a reasonable one by the time I retire. A couple of 100 a week to add to the state one.

My big fear is that in 20 years time who ever is in power will look and see “ah paddy fair play, you were wise when you were young and put a few quid away, tell you what we are going to means test the state pension and as you put a few quid away we are gonna **** you”.

Nijmegen · 26-01-2020 9:41am

twowheelsonly wrote: »

What is the comparative tax take for the government in the same time frame though ?
USC alone raises 4 to 5 billion per year with the Pension Levy raising another Billion or so. They're taxes that we didn't have in 2007.

Those taxes replaced other taxes that collapsed in nature. We can absolutely afford right now today to keep the pension age at 65. It will “only” cost €500m per year and things are good right now - high employment, high corporation tax, etc. The issue is that we know that even if things stay good forever, demographically in 16 years - Not all that long! - the number of people working and paying PRSI etc per retired person will have halved.

This debate often revolves back to a moral argument: People worked all their lives etc etc. And if we choose as a society to make the decision that actually, yeah, let’s keep their pensions unreformed and at 65, that is a valid policy decision. However, in 16 or 30 years time and beyond I wouldn’t fancy relying on the state pension staying as it is, becoming a proportionally huge part of all government spending, and finding my grey vote outnumbered by angry workers who feel they’re getting shafted on my behalf when it was clear decades ago we should have reformed or we’d be leaving them with unsustainable bills to pay.

And by the way I do think there are plenty of other nuanced reforms the state could / should make to pensions and social welfare generally. I’d actually start with making PRSI contributions go into a personal fund you draw down from when unemployed or retired, topped up by government through equalisation from people earning more / longer to those earning less / shorter time period. Let people actually own their PRSI fund and then sure if you decide you want to retire at 55 and buy an annuity with your PRSI fund alongside your PRSA, knock yourself out.

Pawwed Rig · 26-01-2020 9:45am

They should create some kind of fund now to pay pensions later. They could call it something like the 'reserve pension fund'. That would solve the problem

listermint · 26-01-2020 9:46am

wmahcm wrote: »

People are now living too long and are much harder to control and manipulate if they have time and an independent source of income. The older and wiser are also harder to fool and brainwash.

Brexit entirely disagrees with your final statement.

Phoebas · 26-01-2020 10:23am

Pensioners and those approaching pension age vote, so governments will always seek to protect pensions.

Eventually the demographics will mean that they have no choice, but in the meantime lack of action on pensions reform will mean less money for health, education, infrastructure and social services.

If you are a young voter (<40) then you're going to be hit by a double whammy - reduced services for you and your family, followed by a much reduced pension.

FishOnABike · 26-01-2020 10:41am

Nijmegen wrote: »

The state pension is not backed by a fund in your name. Your PRSI contributions mostly go out as they go in. So what matters is how many working age people there will be for pensioners in 15 years. That number will be half what it is today per the CSO models on it.

As for allowing people to contribute more to their pensions, tax relief is available up to €115,000 per year of income on contributions ranging from 15% in your 20s to 40% in your 60s. Not sure how much more generous the state could be in not taxing money you decide to save for yourself for retirement.

It could be treated as deferred income and, subject to a limit of a % of current income and/or an absolute amount in any given tax year, be ignored in full as taxable income and only subject to any tax as the pension is drawn down.

amadangomor · 26-01-2020 10:44am

wmahcm wrote: »

Irish governments always have and always will waste money.

Do you really believe the contributory state pension is one of the worst wastage's ?

First and foremost it should be at a sustainable level determined by how much the country can afford balanced with people having a minimum standard of living. Raising it to buy votes is wrong.

Mad_maxx · 26-01-2020 10:46am

Pawwed Rig wrote: »

If they stopped raising it every year to buy votes it wouldn't need an age increase. At the end of the day it comes down to cost. The govt is not able to deal with the money we give them in any kind of efficient manner so wastage has to be absorbed somewhere

The government has absolute political cover to spoil pensioners, the public support it broadly speaking

Willie o dea has done nothing this past four years other than demand more money for pensioners, Regina Doherty felt constant pressure to match FF promises

Mad_maxx · 26-01-2020 10:50am

wmahcm wrote: »

I wouldn't worry about it, there won't be a contributory state pension by the time you retire. The ever increasing indoctrination of ageism into Irish society will ensure it has been phased out long before then.

Ireland is indeed ageist but against the young

FishOnABike · 26-01-2020 10:51am

893bet wrote: »

I am building a small private pension. Hopefully a reasonable one by the time I retire. A couple of 100 a week to add to the state one.

My big fear is that in 20 years time who ever is in power will look and see “ah paddy fair play, you were wise when you were young and put a few quid away, tell you what we are going to means test the state pension and as you put a few quid away we are gonna **** you”.

I can very well see this happening, and easy to justify when it does.

There was a time when pay related social insurance was truly pay related.

What you paid in was related to your income and what was paid out e.g. jobseekers benefit if you were temporarily unemployed was also related to your previous income. Now jobseekers benefit is a flat rate and the duration of the benefit has been reduced.

I'd say it's not a matter of if but when the noncontributory and contributory old age pensions get the same treatment.

Galwayguy35 · 26-01-2020 10:55am

893bet wrote: »

I am building a small private pension. Hopefully a reasonable one by the time I retire. A couple of 100 a week to add to the state one.

My big fear is that in 20 years time who ever is in power will look and see “ah paddy fair play, you were wise when you were young and put a few quid away, tell you what we are going to means test the state pension and as you put a few quid away we are gonna **** you”.

Wouldn't be a bit surprised, Governments here go out of their way to look afer the scroungers and the way they do this is hammer working people with tax.

Nijmegen · 26-01-2020 10:57am

FishOnABike wrote: »

It could be treated as deferred income and, subject to a limit of a % of current income and/or an absolute amount in any given tax year, be ignored in full as taxable income and only subject to any tax as the pension is drawn down.

Unless I’m reading you wrong, that is what occurs? So when you’re in your 20’s you can contribute 15% of your income into a PRSA net of tax. In your 60s you can contribute 40% and there’s a sliding scale in between based on age.

So, let’s say I’m earning €50,000 per year and I decide to contribute 10% of my income to my pension, that comes out before tax. So in my paycheque I actually only lose about €2,500 of net pay, €208 per month, versus the €416 I’m actually contributing.

Better than deferred tax then, there are really beneficial tax rules when I decide to start taking out my pension. I can draw down a tax free lump sum at retirement. Yes if my pension is worth a lot I’ll pay income tax on part of what I get month to month thereafter, but my total effective tax bill on the €5,000 I put into my pension this year will be significantly lower than if I paid 52% on it at the top marginal rate today.

Brendan Bendar · 26-01-2020 10:58am

Saying the pension age doesn’t need to be touched makes about as much sense as someone in 1972 saying the road system we have now is fine for the future.

Mad_maxx · 26-01-2020 11:00am

Brendan Bendar wrote: »

Saying the pension age doesn’t need to be touched makes about as much sense as someone in 1972 saying the road system we have now is fine for the future.

The pension crisis that is coming at us like a freight train will make 2008 look like a garden picnic in terms of the impact and over a much longer period

No TD calling for more money for pensioners should be returned to the dail

Brendan Bendar · 26-01-2020 11:16am

Mad_maxx wrote: »

The pension crisis that is coming at us like a freight train will make 2008 look like a garden picnic in terms of the impact and over a much longer period

No TD calling for more money for pensioners should be returned to the dail

I’d agree Max, once again we have the situation highlighted by the poll results out today Sunday that it’s electioneering and populism at work.

These ‘promises’ will be decked when the reality takes hold, but that won’t become apparent until well down the road.

FG had a big drop in today’s polls because they stuck more or less to their guns about the need to increase the pension age.

The other parties took the easy route, thus advancing their popularity for this period, this short period until eventual reality hits home.

Long term misery for short term gain.

Guy:Incognito · 26-01-2020 11:20am

Samara Bumpy Storybook wrote: »

The French didn't agree with such proposed age rises, and so have now theirs reduced down to 64.

And then when the country runs put of money to pay them when they are old, they'll send out the kids to smash up the place again.

Nothing shows the government you mean business more than wrecking some private citizens cars and businesses.

Plus, when it suits, people of 65 are frail old pensioners that need all the help they can get, when it doesn't then 65 is no age to be throwing people on the scrape heap because 65 isn't what it used to be.

wmahcm · 26-01-2020 11:22am

Mad_maxx wrote: »

Ireland is indeed ageist but against the young

and against the old

listermint wrote: »

Brexit entirely disagrees with your final statement.

trying to blaming old people for Brexit is the very definition of ageism.

wmahcm · 26-01-2020 11:23am

listermint wrote: »

Brexit entirely disagrees with your final statement.

as I said ageism is being promoted in Ireland

wmahcm · 26-01-2020 11:26am

Phoebas wrote: »

Pensioners and those approaching pension age vote, so governments will always seek to protect pensions.

Eventually the demographics will mean that they have no choice, but in the meantime lack of action on pensions reform will mean less money for health, education, infrastructure and social services.

If you are a young voter (<40) then you're going to be hit by a double whammy - reduced services for you and your family, followed by a much reduced pension.

Funny how this "choice" didn't apply to borrowing billions for generations to preserve developers, politicians and bankers pensions and wealth.

wmahcm · 26-01-2020 11:30am

893bet wrote: »

I am building a small private pension. Hopefully a reasonable one by the time I retire. A couple of 100 a week to add to the state one.

My big fear is that in 20 years time who ever is in power will look and see “ah paddy fair play, you were wise when you were young and put a few quid away, tell you what we are going to means test the state pension and as you put a few quid away we are gonna **** you”.

That's exactly what is going to happen, anyone who is banking on the full contributory state pension being available for them in the future is going to be screwed over by "means" testing.

Beasty · 26-01-2020 11:31am

As the population ages (and it will - that's the pattern across the developed World and Ireland will be no different, there will be more pensioners are fewer people paying tax to fund those pensions

Life expectancies have risen by well over a decade in my own lifetime. We now have more than double the amount of pensions to fund than when I was born and this continues to increase. there has been a near 60% increase in the population over pension age in those past 2 decades alone

Hence the money will run out.

It's been forecast for at least 2 decades and the chickens re coming home to roost. The pensions timebomb is pretty much upon us and people in work will become increasingly resentful that they are having to have the ever increasing burden of funding pensions (and other social welfare costs)

Yes efficiencies can be made, but ultimately pensions have to be pared back - the easiest way to do that is to recognise the increase in life expectancy and defer the pension age

Guy:Incognito · 26-01-2020 11:32am

On the "people have been working x years and then being entitled to the pension at the end" standpoint.

Say a state pension of 230 or whatever its is. Considering the amount of people on low income , or no income, how many are actually paying upwards of 230 a week in tax?

Enough to cover, say, 20 years of getting that every week guaranteed?

wmahcm · 26-01-2020 11:35am

Beasty wrote: »

As the population ages (and it will - that's the pattern across the developed World and Ireland will be no different, there will be more pensioners are fewer people paying tax to fund those pensions

Life expectancies have risen by well over a decade in my own lifetime. We now have more than double the amount of pensions to fund than when I was born and this continues to increase. there has been a near 60% increase in the population over pension age in those past 2 decades alone

Hence the money will run out.

It's been forecast for at least 2 decades and the chickens re coming home to roost. The pensions timebomb is pretty much upon us and people in work will become increasingly resentful that they are having to have the ever increasing burden of funding pensions (and other social welfare costs)

Yes efficiencies can be made, but ultimately pensions have to be pared back - the easiest way to do that is to recognise the increase in life expectancy and defer the pension age

and what pensions are you hoping to "pare back" .. let me guess working peoples contributory one, while the welfare class and the rich will get off Scott free as usual.

Mad_maxx · 26-01-2020 11:39am

wmahcm wrote: »

and against the old

trying to blaming old people for Brexit is the very definition of ageism.

The elderly are spoiled beyond belief in this country

explain the need for a pension age extension...

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