An investigation on the future of pensions in Ireland ordered by Joan Burton has come back with their findings, namely that we all need to contribute more from a much younger age.
It's often been called a timebomb, and it's genuinely good to see Burton taking the pension problem seriously. Simply put: People are living longer and the tax payers of 40 years time won't be able to cover the current lot's state pensions. Effectively the number of people at pensionable age will double by 2050.
The report suggests a hardline, that all middle/high earners should put in 15% towards a pension fund on a mandatory basis.
So what are the options open here? My feeling unfortunately is that Burton will balk from what needs to be done and, without offering numbers to justify the decision, allow a smaller % and that it's not quite mandatory.The report commissioned by Social Protection Minister Joan Burton recommends that most of the one million workers with no pensions should be signed up for a private scheme and given no option to leave it. The study -- from Paris-based international think-tank, the Organisation for Economic Co-operation and Development (OECD) -- says the most "effective and least costly" way to deal with the mounting pensions crisis is to force cash-strapped workers to put aside some of their wages to fund their retirement.
At present, six out of every 10 private-sector staff have no work-based pension -- and rely on the state- contributory pension when they retire.
With the number of pensioners set to explode over the next three decades, the taxpayer can no longer afford to keep state pensions at the current level.
The govt (And opposition) need to unify and take a hardline on this. It is the real, material, long term financial concern the state faces. People need to start saving their money for their old age and they need to start doing it now. I can't see a way out of this under than a decent % of earnings going towards their pensions. Phase it in over a period of time (5% will be taken in 2 years time, 10% in 5 and 15% in 8).She has spoken of a system where those who have no private pension are automatically enrolled in one, but can then choose to opt out.
Up to now, the expectation was that contribution levels would be around 8pc, with workers, the State and employers all making contributions.