Why is there no concern about the state's unfunded pension liabilities?

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This will be a much different issue than the banking crisis. It will be like global warming....it's not worth the effort of any single person today to try and fix this as it's going to happen anyway. The effects will only be felt over time, bit by bit, like death by a thousand cuts, and when the brown stuff hits the fan, it will be too late.

Therefore, I would be in favour of the following:

1. Forcing workers to put a % of their pay into a pension. I'd leave it to the boffins to calculate this percentage. I would also like to see that it would be possible to use any pension fund regulated in the EU rather than the small, cosy cartel of pension providers here

2. Put a line in the constitution that private pensions cannot be levied by the government - this would give people the confidence to save for a pension

3. Limit Old Age Pension increases to something like 90% of the cost of living increase, over a long number of years (i.e. inflate away the problem) and only when the economy is in a surplus

4. Switch all public sector pensions to defined contribution immediately (by all means honouring defined benefits accrued up to now) - this would draw a line under this massive liability, where it could be financed by separate bond funding down the road. There would also be a better chance for PS workers of getting their pensions too!

Any other suggestions?

Firefly.
 
orka said:
I started off thinking that it's a huge problem and something should be done. Now I still think it's a huge problem but from a selfish, personal point of view, I don't think it's in my interest for something to be done. As a high earner, I can pretty much guarantee that any solution will involve me paying in a lot more than I would ever get back. I am better off putting the cost of any solution into my own savings and looking after myself - in the full expectation that the contributory pension will be a lot lower/means-tested when I retire in 20/25 years time.
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Orka, you & I are in the same boat and we are both rowing in the same direction! As much as I'd like to increase my pension provision here, I just see it being taken from me when I need it most. Granted the tax benefits are good putting funds into a pension, but I think I am going to take my chances with my own investments
 
Hi Duke!

I understand your argument for the government to concentrate their efforts on acheiving maximum growth in the economy over the longterm as the best way of meeting future obligations. In a perfect world I would agree, however, all you have to look at is what happened during the CT to understand what happened when there was funds in the coffers! It goes out faster than it comes in. All the vested interests lined up with their pockets opened. Remember those trips to NY by the great & good in FAS? In additon, external forces such as international recessions can scupper the best efforts by any individual government. Given that our economy has never really been constant, but either in a state of incline or decline, leaving the provision of pensions entirely on the status of the economy at any particular time would be dangerous in my opinion. Best to take a small bit out of the economy over a long period of time.

Firefly.
 
Next Witness: Gerry Adams Tanaiste

Chairman: Mr. Adams, you are 85 years of age and have been in charge of your party for quite some time now

Adams: A cairde, mise ni ocras ar...

C: Inquiry adjourns for 20 mins to source an interpreter

20 mins later....

C: Don't you think your decision to exit the euro with the subsequent 10 fold devaluation of the punt contributed to this crisis?

Adams: Not at all. It was that ridiculous white elephant of a tunnel which the blue shirts built to their beloved brits.

C: Tomorrow you are entitled to your Old Age Pension. Will the 30% reduction affect you personally.

Adams: Ah naw, sure that much went to the party anyway.
 
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Just to add (I really should have bunched all my posts together), I think that:

(1) the OAP will be means tested in years ahead, and I wouldn't be surprised if the home was taken into account in this calculation either
(2) if you have income from other sources, such as another pension, your OAP might be reduced

I think the association people have with the OAP currently is that it is a right. Going forward, perhaps, it may be seen as a help to the less well-off, like the dole is now.

Firefly
 
Firefly said:
I would also like to see that it would be possible to use any pension fund regulated in the EU rather than the small, cosy cartel of pension providers here.
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Irish pension funds need to be better regulated to start with and why not mandate the minimum acceptable returns as we do here in Switzerland. Here a pension fund is required to provide investors with a minimum return as defined by the government from time to time before fees can be drawn and failure to reach the required return means that the management company must top up the fund to meet the required rate of return. And even with these rules we have no shortage of pension funds on offer.
 
Jim2007 said:
Irish pension funds need to be better regulated to start with and why not mandate the minimum acceptable returns as we do here in Switzerland. Here a pension fund is required to provide investors with a minimum return as defined by the government from time to time before fees can be drawn and failure to reach the required return means that the management company must top up the fund to meet the required rate of return. And even with these rules we have no shortage of pension funds on offer.
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Wow! That is incredible. What sort of minimum returns are required these days?
 
Jim2007 said:
Irish pension funds need to be better regulated to start with and why not mandate the minimum acceptable returns as we do here in Switzerland. Here a pension fund is required to provide investors with a minimum return as defined by the government from time to time before fees can be drawn and failure to reach the required return means that the management company must top up the fund to meet the required rate of return. And even with these rules we have no shortage of pension funds on offer.
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Hi Jim,

Would this not just promote more risky investments in order to try to meet the required returns?

Firefly.
 
Firefly said:
Would this not just promote more risky investments in order to try to meet the required returns?
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No because the asset classes, allocations and even the instruments are also regulated, discressionary investing is limited to around 5% of the fund. Most funds are also required to report on a quarterly basis (The Swiss rarely loose their own money :-))
 
Hi Jim

Maybe we should open a new thread because we are moving quite far from Brendan's original question?

Can you elaborate on these investments please? I'm a believer in the no free lunch dictum so I'd like to understand what one is sacrificing in return for guarantees. In general, investment is a trade off between risk and reward - so if guarantees are provided to both capital and growth, there must be significant consequences somewhere. Perhaps there are multiple funds available so, for simplicity, can you use the example of an individual with a long term investment horizon please? The type of info that would be helpful would include:
- what is the typical asset allocation between the different asset classes?
- what is the geographical spread of these investments?
- what is the minimum benchmark return?
- over what period are the benchmarks calculated?
- what are the typical charges if the required return is achieved?
 

Fund that pays state pensions and jobseekers benefit recorded a €6.2bn surplus last year​

The Social Insurance Fund (SIF) recorded a surplus of €6.2bn last year, up from €3.7bn in 2024, according to its latest financial accounts.

Cash receipts into the fund reached €19.7bn in 2025, up from €18.3bn a year earlier with PRSI receipts accounting for the bulk of the money coming in.

Payments from the fund also increased, rising to €15.2bn from €14.6bn in 2024.
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Just to be clear - there is no fund, as such

It's an accounting term used wrongly - the money goes in and comes out but it is mixed up with all the other government monies

Using the term "fund" gives the impression that the money is set aside and accumulates independently of other monies - this is not the case
 
jpd said:
Just to be clear - there is no fund, as such

It's an accounting term used wrongly - the money goes in and comes out but it is mixed up with all the other government monies

Using the term "fund" gives the impression that the money is set aside and accumulates independently of other monies - this is not the case
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I was just going to ask about this - i.e. how/why they're referring to a fund above (and in the original post) when it was my understanding that there wasn't actually a discrete fund at all.

Can anyone explain in layman's terms why they're referring to a fund and what they mean by it?
 
ClubMan said:
Can anyone explain in layman's terms why they're referring to a fund and what they mean by it?
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I understand it as a current account - prsi etc in, and pensions, social welfare etc out. I think this surplus is a case where the money in exceeded the money out for a calendar year, rather than needing to be topped up from other taxes or borrowings. If you read the article with this in mind (it wasn't paywalled for me, which is rare), it makes a bit more sense. You are correct that it is not an investment fund with return on investment.
 
Can anyone explain how we got from here in 2015



Brendan Burgess said:
The State's Gargantuan Pension Gap

The actuarial deficit on the social insurance fund which provides old age pensions is €324 billion.
The equivalent shortfall for the public sector pensions is around €100 billion.

In other words, as a state, we have a liability of over €400 billion, twice the national debt, which we have made no provision for whatsoever.
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to here

Fund that pays state pensions and jobseekers benefit recorded a €6.2bn surplus last year​

The Social Insurance Fund (SIF) recorded a surplus of €6.2bn last year, up from €3.7bn in 2024, according to its latest financial accounts.

Cash receipts into the fund reached €19.7bn in 2025, up from €18.3bn a year earlier with PRSI receipts accounting for the bulk of the money coming in.

Payments from the fund also increased, rising to €15.2bn from €14.6bn in 2024.
 
Is it the case that this year it took in more than it paid out but we have a pretty good idea that the expenses will dramatically increase with an aging population and income will drop at least in relative terms to expenditure. The calm before the storm…
 
Hello,

With regards to the reason that there's no concern is actually quite simple - politicans aren't held to account, so can get away with doing nothing !

The idea that the State is committing to long term obligations with no provision in place to cover the related cost is madness, but has been this way for generations and so far, each Goverment has gotten away with not dealing with it.

Even the recently introduced mandatory pension scheme is laughable, the amounts involved are so small.

The civil servants pension arrangements need to be tackled, or we're all gonna get taxed heavily, in future years, to pay for them !
 
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MrEarl said:
The civil servants pension arrangements need to be tackled, or we're all gonna get taxed heavily, in future years, to pay for them !
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Public service pensions were reformed in 2013, which significantly reduced future pension liabilities.
 
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