Ireland’s State pension system is unsustainable in its current form, according to international consultants McKinsey.
In a report published today, they say current contributions to the Social Insurance Fund from which the State pension is paid – mostly PRSI – “will be insufficient to continue to pay current levels of benefits in future years.”
They raise similar concerns about public sector pension arrangements where they forecast a threefold increase in the pension bill over the next 40 years.
“The cumulative deficit is estimated to rise to approximately €133 billion by 2040,” they state. Despite concerted efforts to reduce that deficit in recent years, “structural systematic reforms are required to effectively curb it”.
Maintaining payments at current rates would require an increase in contributions of five percentage points from all workers, McKinsey states. The alternative would be to cut benefits by around 35 per cent across the board.
Personally, I would like to see this topic become a key issue in the upcoming general election.
In a report published today, they say current contributions to the Social Insurance Fund from which the State pension is paid – mostly PRSI – “will be insufficient to continue to pay current levels of benefits in future years.”
They raise similar concerns about public sector pension arrangements where they forecast a threefold increase in the pension bill over the next 40 years.
“The cumulative deficit is estimated to rise to approximately €133 billion by 2040,” they state. Despite concerted efforts to reduce that deficit in recent years, “structural systematic reforms are required to effectively curb it”.
Maintaining payments at current rates would require an increase in contributions of five percentage points from all workers, McKinsey states. The alternative would be to cut benefits by around 35 per cent across the board.
Personally, I would like to see this topic become a key issue in the upcoming general election.