Increase in State pension age to 67 should be delayed by seven years, report to recommend

NoRegretsCoyote

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The Pensions Commission report, which was submitted to Social Protection Minister Heather Humphreys in recent days, is understood to recommend that the State pension age begin to rise in quarterly increments to 67 between 2028 and 2031, before gradually increasing to 68 by 2039.
It's a pity that it will be delayed so long, but the policy of doing it in small bites makes a lot more sense than in big chunks. Much less likely to encounter resistance from people feeling hard done by due to their birthday falling a few days the wrong side of the new year.
 

Allpartied

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Raising the pension age is just another money grab from working people. Covid showed us that 70 years of age is considered vulnerable and liable to severe health problems.
Many people in low wage groups will have even lower mortality rates and won't even reach 70 years of age. The state pension is subsistence level anyway, but should be available to people at 65, or even earlier. We should be able to fund a modest retirement for our citizens at an age when they can have some level of active retirement.
We are in the midst of a pandemic which may well see a reduction in life expectancy and add another chronic illness to the spectrum. Another policy mandated by right wing freakonomics. Getting so boring.
 

Shirazman

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Raising the pension age is just another money grab from working people. Covid showed us that 70 years of age is considered vulnerable and liable to severe health problems.

You could claim with equal validity that lowering the pension age is just another moneygrab from working people, given that the Social Insurance Fund would go bust almost as soon as the pension age was lowered - meaning that working people would have to fund those pensions!
 

Allpartied

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Raising the pension age is just another money grab from working people. Covid showed us that 70 years of age is considered vulnerable and liable to severe health problems.
Many people in low wage groups will have even lower mortality rates and won't even reach 70 years of age. The state pension is subsistence level anyway, but should be available to people at 65, or even earlier. We should be able to fund a modest retirement for our citizens at an age when they can have some level of active retirement.
We are in the midst of a pandemic which may well see a reduction in life expectancy and add another chronic illness to the spectrum. Another policy mandated by right wing freakonomics. Getting so boring.

30% of Irish people die before they reach 69, so you can take all their contributions and add it to your imaginary purse.
 

Allpartied

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You could claim with equal validity that lowering the pension age is just another moneygrab from working people, given that the Social Insurance Fund would go bust almost as soon as the pension age was lowered - meaning that working people would have to fund those pensions!
30% of Irish people die before they reach the age of 69, so you could add their contributions to your imaginary purse. They get nothing back.
 

Conan

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When today’s retirees started the working lives, the average life expectancy for a 65 year old then was about 13 years. Today, the average life expectancy for a 65 year old retiree is c20 years (a 50%+ increase). So whilst some would like the retirement age to continue to be 65 (or earlier according to Allpartied), the same people also want lower taxes and are unwilling to fund even longer State Pensions. Only in the SF world of Narnia economics can these contradictions be squared.
 

fayf

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On first reading, it sounds like its logical and socially fair, if implemented. The new, much more gradual phasing in, is hard to argue with, and it deals with the current reality of people living much longer, which has to be managed and paid for.
 

Shirazman

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30% of Irish people die before they reach the age of 69, so you could add their contributions to your imaginary purse. They get nothing back.

If married, then their surviving partner (and kids) can benefit from their contributions.
Anyway, their contributions are included in the Social Insurance Fund that will go bust if SF's absurd State Pension at age 65 proposal is implemented.
 

NoRegretsCoyote

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in the Social Insurance Fund that will go bust
The social insurance fund (SIF) is just an accounting concept. There is no investment strategy, there are no benefits that won't get paid if it runs out of money. The SIF has been in deficit for most of its existence with the Exchequer acting as residual financer.

Overall state capacity to deal with costs of ageing (not just pensions but social care) is the issue here.
 

Allpartied

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When today’s retirees started the working lives, the average life expectancy for a 65 year old then was about 13 years. Today, the average life expectancy for a 65 year old retiree is c20 years (a 50%+ increase). So whilst some would like the retirement age to continue to be 65 (or earlier according to Allpartied), the same people also want lower taxes and are unwilling to fund even longer State Pensions. Only in the SF world of Narnia economics can these contradictions be squared.

Irish GDP has increased by over 500% in the last 20 years. There is a lot of wealth being created in this economy. More than enough to cover a pittance for people in retirement and to deal with the ageing crisis.
Productivity and efficiency are improving every year, with automation continuing to streamline production. Wealth creation is not the issue.
Distribution is the issue.
Forcing 68 year olds to queue up at the bus stop in the middle of winter and work in arduous jobs is dystopian. Like the old landlords, in the famine, who made the peasants build follies, because of some bizarre attachment to medieval morality.
 

michaelm

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65 is a reasonable retirement age for a modest payment. Methinks they should have left it alone or perhaps replaced all welfare with a universal payment. Faffing around with it will probably only serve to elect SF . . which could prove far more expensive than a retirement age of 65.
 

fayf

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Not really faffing, this has been topical for decades, and 10 years ago FG/Labour at least, made a decision, (which others failed to grapple with- kick the can) to deal with it, after a prolonged analysis, and generally speaking, what has been recommended today, is broadly aligned, to what they decided in 2011.

The recent CSO age profiling reports, indicated a significant increase in the older age group, in the last 5 years, over 65’s increased by 17.90 % which will further accelerate, over the coming decades. This was all predicted back in 2011 when the changes were made.


https://www.rte.ie/news/business/2021/0831/1243848-cso-population-figures/

SF will say anything to get votes, but never say how its going to be paid for, but the facts do not lie.
 

Dave Vanian

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This is an interesting debate. Following on from Conan's point, here's a handy table of average longevity in Ireland since 1950. https://www.macrotrends.net/countries/IRL/ireland/life-expectancy

Even in the short space of time since I started working full-time (late 1980s) it's gone up by 8 years. Those additional 8 years of a full State pension - roughly €13,000 per year - is the equivalent of an additional cost of around €100,000 per person to the State.

So where's all that extra money to come from?

Allpartied believes that it's not an issue...

Irish GDP has increased by over 500% in the last 20 years. There is a lot of wealth being created in this economy. More than enough to cover a pittance for people in retirement and to deal with the ageing crisis.

I'm not an economist but I tend to view GDP a bit like turnover of a business. A nice headline figure, but I'm more interested in the bottom line, after all the costs.

So on one side of the debate, it's a verifiable fact that our increasing longevity, while welcome in many ways, is going to cost the State a huge amount of money per year. Think €13,000 x every retired person x 8 years or whatever time period you're looking at.

Does anyone have figures to show that our increased GDP, net of all the expenditure is sufficient to pay the huge additional cost of the State pension? This is not a rhetorical question - I'd be genuinely interested to see. I work on the pensions side of the debate so I'm far more familiar with the cost of the State Pension. I'm less familiar with the income side - where the money is coming from and how much extra we have to go around, compared with a few decades ago.
 

Allpartied

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This is an interesting debate. Following on from Conan's point, here's a handy table of average longevity in Ireland since 1950. https://www.macrotrends.net/countries/IRL/ireland/life-expectancy

Even in the short space of time since I started working full-time (late 1980s) it's gone up by 8 years. Those additional 8 years of a full State pension - roughly €13,000 per year - is the equivalent of an additional cost of around €100,000 per person to the State.

So where's all that extra money to come from?

Allpartied believes that it's not an issue...



I'm not an economist but I tend to view GDP a bit like turnover of a business. A nice headline figure, but I'm more interested in the bottom line, after all the costs.

So on one side of the debate, it's a verifiable fact that our increasing longevity, while welcome in many ways, is going to cost the State a huge amount of money per year. Think €13,000 x every retired person x 8 years or whatever time period you're looking at.

Does anyone have figures to show that our increased GDP, net of all the expenditure is sufficient to pay the huge additional cost of the State pension? This is not a rhetorical question - I'd be genuinely interested to see. I work on the pensions side of the debate so I'm far more familiar with the cost of the State Pension. I'm less familiar with the income side - where the money is coming from and how much extra we have to go around, compared with a few decades ago.

But your not just giving people money.
The money is spent, virtually every penny of it, in the economy. It sustains jobs, services and businesses.
In the same way as the Covid payments were essential to our economy and societal stability, the pension is a simple mechanism to promote well being. If we stopped it, along with all other state benefits, we would " save" billions, but the economy would crash and we would be living in a nightmarish world.
 

Dave Vanian

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GDP nets out the costs too!

To simplify greatly it's profits of businesses plus wages of households.

Thanks. Don't want to drag this thread off-topic, but surely Gross Domestic Product isn't really a valid measure of figuring out how much money a country actually has to spend. My comparison would be: Person A has an annual income of €100,000, no debts and no mortgage. Person B has an annual income of €200,000 but has a huge mortgage, 9 kids, two big car loans, a spouse with expensive tastes etc. If additional spending is required, Person A is going to be able to fund it far better.
 
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