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Pension time again August 17, 2016

Posted by WorldbyStorm in Uncategorized.

Last night Alibaba pointed to two examples of the current rhetoric about pensions – one was very useful, the second very revealing. Alibaba noted:

Here’s an observation of what happened here:

‘Consider the Government’s decision to move the pensionable age to 68 by 2028. This decision means that someone retiring after this will effectively lose three years worth of pension entitlements.

“It wiped out €36,000 overnight, yet no-body gave out about it.”‘ So says Gary Owens, the Managing Director of Willis Ireland, an insurance broker, pensions, actuarial and risk management consultancy.

And for proposals to see what’s coming down the line:


As ever the second article refused to face up to the fact most people aren’t paid enough to fund pensions.

But what of this ‘move to a pensionable age of 68 by 2028?’.

Here’s more on that:

Retirement at the age of 65 is increasingly impractical, a new Government report argues. It says workers and their employers need to accept that working for longer is both necessary and desirable.


Publishing an interdepartmental report on work and retirement, Minister for Public Expenditure and Reform Paschal Donohoe said the Government would encourage the private sector to allow workers to continue in employment beyond the traditional “normal” retirement age of 65.
His department and public service employers will also review “barriers to extended participation in the public service workforce”. The Minister noted changes to public service employment rules in 2013 mean recently recruited staff can avail of a maximum retirement age of 70.


The interdepartmental group was commissioned to find a way to bridge the financial gap between the time people retire at 65, or earlier, which is still the norm, and the payment of State pensions at the age of 66. In five years’ time, this will be pushed out further, to 67, and to 68 by the year 2028.

I’m sure I’m not the only one who wonders how this will work in practice. One can readily envisage a divergence between those whose pension provision allows them to depart the workforce in their fifties or early sixties and those who are forced by dint of necessity to hang on in there until the bitter end.

And note that for all the talk about ‘normal’ and ‘transitions’ there’s this unpleasant reality:

The notion of a “retirement age” needs to adjust, at least in line with planned increases in the age of eligibility for the State pension, the report states.
At present, anyone retiring, or forced to retire by their employer, may apply for jobseeker’s benefit until they turn 66. The maximum benefit payable, €188 a week, is €45 less than the State pension.

having worked in the private sector most of my life, and on contract in the public sector as well, I’m deeply sceptical about forcing people to stay on and on and on. And if we are to judge from what is actually happening as distinct from what we are told should happen this doesn’t tend to offer confidence:

The problem is that, in the private sector especially, few employers have yet adjusted to the new reality – despite Ibec saying to the report’s authors that feedback from those employers who had kept workers on beyond the age of 65 had been positive.
As a result, workers are being shown the door on their 65th birthday. And, with just 40 per cent of private sector workers having any private occupational pension by the report’s estimation, they are relying on the State pension to pay their bills.


Now they must wait, and most are being forced to register for Jobseeker’s Benefit for the 12 months before their State pension kicks in just to survive financially.
That position will be exacerbated in five years’ time so getting workers and their employers to adjust to a new normal is timely. According to the report, just 3.2 per cent of the Irish workforce was aged 65 or older in 2015 after the new rules had kicked in. That must change.

Think of that. Not just a year but two, three or however many subsisting on Jobseekers Benefit in the context of employment situations where ones previous job is finished and finding new ones difficult – given one’s age. And this talk of ‘adjustment’ seems utopian. As Dominic Coyle notes;

Given the robust and articulate way in which the report presents the case for working later in life, ultimately its recommendations are underwhelming.
Essentially, the proposals look to ensure that employers and workers are more aware of what rights and options are currently available, and that courses are developed to reskill older workers.
There will also be a review of barriers to public servants working up to the new, deferred dates for drawing down the State pension – an issue essentially for those employed after 1995 and before April 1st, 2004.

Of course the financial aspect is key. This is the state attempting to shrug away part of its responsibilities and a private sector that is largely uninterested in pension provision for all but a minority of those who work in it. But it is also indicative of a broader lack of responsibility in relation to pension provision more widely.


1. EWI - August 17, 2016

Politicians (and public servants) shouldn’t be allowed to draw a pension until they reach the State pension age. That’s one change that everyone else can get behind, and will help focus the minds of sociopaths on the stark reality for most of us if this goes through.


EWI - August 17, 2016

(Needless to say, this needs to be retroactive for current politicians and publuc servants. Let them go to court and explain how the increased ages are cruel, etc.)


CMK - August 17, 2016

EWI, how naive! There are PROFOUND constitutional questions raised by the prospect of cutting politicians pensions. Questions which impact on our very way of life here. Cutting politicians pensions would be ruinous and could well set off the apocalypse! We wouldn’t want that, now, would we! Brexit and the bailouts are minor issues compared with cutting politicians pensions. Best leave things as they are for the sake of our children, and our children’s children.


2. Phil - August 17, 2016

“Public servants” is it? State pension age in the UK is in the process of being pushed up to 68 for both sexes; it’ll probably go to 70 eventually. At the same time that change was brought in, the government decreed that public sector employees would not be able to retire before pensionable age (although for some reason(!) the police were excluded; they can still retire at 55, would you believe). Previously I would have been able to retire at 60, then live on a slightly reduced occupational pension (or in my case several different bits and pieces of occupational pensions) until the state pension kicked in. Now I don’t get anything until I hit 66 and a half, or something like that. Unlike my wife, who works for a bank and can still retire at 60.


WorldbyStorm - August 17, 2016

70 if we’re lucky!


EWI - August 17, 2016

I, too, will draw a public pension when I retire (the only thing they haven’t yet hit for pre-CP employees), untouched as yet. I expect strokes to be pulled as in the UK, though, with poison pill measures to divide one set of PAYE workers from another (probably with the usual telegraphing of rightwing pets in the media suddenly all discovering an issue at once).

They’ll try it once enough ‘new entrants’ are in and on their (much worse) new pension conditions.


3. Seedot - August 17, 2016

The gradual return of the pension age to the 70 years old it was introduced at in 1908 is a clearly understood social regression – after a 100 years of technological advancement and continuous productivity growth we are rolling back most of the gains of the 20th century social democratic compact because we can’t afford to look after our old. Apparently its their fault for living too long (as opposed to reduction of the state role, growing inequality and ongoing reduction of corporate contribution to civic society).

The media onslaught in this area is fairly consistent and widespread.

I am a bit confused when you say:
“a private sector that is largely uninterested in pension provision for all but a minority of those who work in it.”
Surely the withdrawal of the state is a huge opportunity for new financial products to be sold to us all – whether through fear of poor state provision or mandatory pensions as a quid pro quo for reducing social insurance payments.


WorldbyStorm - August 17, 2016

Yes. Great point. There is a clear retreat from the social democratic compacts established across a century or more.

Sorry I should have been clearer. I was thinking more of individual companies who offer pensions to their employees rather than the pensions industry which as you say is chomping at the bit to get in there.


EWI - August 17, 2016

Retreat or stealth dismantling?


WorldbyStorm - August 17, 2016

Yeah. That’s another great point. Retreat by the ‘left’ and stealth dismantling by the centre and right.


Alibaba - August 17, 2016

Old age pension provision was implemented in Ireland in January 1909 for for those over 70 years of age whose annual means did not exceed £31.50 and to ‘be of good character’. It was was lowered to 65 or 66 years afterwards, but I can’t remember the exact date.

Old age pension provision was introduced in Bismarck’s Germany in 1889 for those of over 70 and lowered to 65 in 1916.

I agree with Seedot who said: ‘we are rolling back most of the gains of the 20th century social democratic compact’. But I’m not so sure that this is ‘because we can’t afford to look after our old.’ I tend to disbelieve those establishment figures who say we don’t have the numbers to support this, given the enormous growth of the youthful potential tax-payers population.

I believe that what is going on now has an intended aim to reduce pensions to something like a 1909 level where workers’ wages and savings will be expected to cover all needs (including health which will be increasingly privatised).

Austerity budgetary policies can tend to be self-fulfilling in creating a slowdown. More likely austerity will be combined with privatisation to reduce state responsibility and increase investor profits. Unless there is a fight back and who the hell will bring it on? Enough of auld guff from me.


4. EWI - August 17, 2016

The ‘crisis’ for pensions is a manufactured scare. Given (i) the widespread tax avoidance by corporations (and high-worth individuals like our lovely RTÉ stars) and (ii) the massive increases in individual productivity in the past forty years. This can be afforded, easily, if there was a will.


5. Jim Monaghan - August 17, 2016

Pensions and job seekers benefit/assistance should be regarded as coming from the same pot. While not a solution, I think it is better to have more people retired and much less young people unemployed. The social damage to and the destruction of young people is a huge scandal.


6. Alibaba - August 17, 2016

I rubbed my eyes in disbelief in reading what follows below. I had to keep re-reading the sentences to ensure I read it right:

“Chairman of the Pensions Authority David Begg said that what people expect to receive in retirement income was way out of line with what they will actually get.

He said too few workers had pensions and many of those that have a private pension in place were putting too little into it. …He said poor investment returns, low annuity rates and high charges meant that someone with €100,000 saved into a retirement fund could only expect between €3,000 and €5,000 a year in retirement from this. …

He warned that various reports had found that the State pension of €233 a week was unlikely to be kept at this level due to the future swelling of the ranks of the retired.”

What’s more Begg said: “My advice is to calculate how much you need to buy your house in the sun and how much income you need to live on comfortably. Sit down with a financial adviser and work out how much you need to save.”


Jack O’Connor of SIPTU comes out shadow-boxing:


So there you have it. Notwithstanding that all our pension provision has been and will continue to be financed by a tax on workers, these former and current representatives of workers are allowing it to happen on their watch. They are instructing us to knuckle-down, put up and shut up about it, by buying into auto-enrolment or mandatory schemes. Why? To meet the alleged financial shortfall. Consider ‘buying in’ to be the operative phrase. I call it as a disguised attempt at deeper exploitation.

We may say goodbye to state pensions, or more likely those at a lower paucity level than currently applies. It ain’t looking good.


EWI - August 17, 2016

It beggars belief to see supposed union chiefs, alleged socialists, advocating a privatisation (and pillaging; there WILL be pillaging by the private insurance sector) of the basic need for an old age pension.


Ed - August 18, 2016

“various reports had found” – a good grammatical rule of thumb in these matters: passive voice = cowardly, snivelling, weasely little creep.


7. Gewerkschaftler - August 18, 2016

This whole campaign about pensions is coordinated. Not just in Ireland, but in Germany as well. Lobbyists for finance capital want to garner massive fees and further transfers of wealth through dodgy (see the whole CALpers example in the US) pension scams.

Pensions should and could be a simple matter of inter-generational solidarity. People who are too old to work can and should be given enough to live a dignified life on by those of working age.

End of story.

In Ireland’s case just and proper taxation of Apple, Google, Microsoft, Facebook, assorted Big Pharma firms etc. etc. would provide the money.


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