IRELAND - The government today released its much delayed green paper on the future of pensions.
The document covered the current and future state of the Irish pension system, and outlined the options available to the country as it attempted to reform the current system.
Ireland faced a pension ‘time bomb’, through a profound demographic shift over the coming decades, according to the paper which listed a number of statistics the coutry's system would have to manage.
Life expectancy was expected to significantly improve in the years up to 2061, with male longevity calculated to increase to 84.6 years, up from 76 years at present, and female longevity to increase to 89 years, up from 81 years.
In sharp contrast, the ratio of active workers to retirees would decrease sharply from 6:1 at present to 2:1 in 2061, which would pose a significant risk to the long term sustainability of the system as it existed.
More worrying was the evidence, albeit limited, that a large proportion of the population were not saving enough to adequately provide for retirement
By 2050, spending on public pensions was set to more than double, increasing from 5% GDP to 13% GDP.
Options to reform the system included maintaining the status quo, universal pension provision, increasing the level of social welfare, Special Saving Invesment Account-type tax incentives and mandatory legislative approaches.
The paper also discussed considerations on how to create incentives for retirement saving, defined benefit (DB) and defined contribution (DC) schemes and work flexibility in old age.
The public consultation would run until mid-2008, with a major conference to be held before then, to fully discuss the issues raised, before the government produces a long term framework for pensions.
The paper has been made available to interested parties to enable a full discussion.
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