(8 October 2021) In an initial reaction to the report of the Pensions Commission published on 07 October, Age Action has said that Government decisions – starting from Budget 2022 next Tuesday – will determine the adequacy of the State Pension as a foundation for a secure retirement for the majority of Irish people in future years.
Nat O’Connor, Senior Public Affairs and Policy Specialist, Age Action said “The success story of living longer, healthy lives means that we do need to plan carefully to fund the income and services that we will all need in older age. The Pensions Commission makes a useful contribution to the extensive research on how Ireland and similar societies can meet this challenge in a way that leaves no one behind. Age Action welcomes the recommendation to immediately implement benchmarking and indexation for future State Pension increases, but we caution that ‘adequacy’ not ‘poverty’ should be the goal of the State Pension, which is why Ireland urgently needs a comprehensive study of the cost of living for people in older age. “
“Stated Government policy is for the State Pension to provide us all with a basic but adequate income in older age. Age Action notes the Commission’s view that the benchmark of 34% of average earnings may not be adequate to prevent poverty in future, and we welcome the proposal for an independent body to advise Government on future pension rates. The goal of the State Pension must remain one of ensuring income adequacy, not merely the alleviation of poverty. The Commission rightly points to the need for measures to sustainably fund the State Pension, and next week’s Budget will be the first indication of how the Government intends to do this” said O’Connor.
“Any plan to fund the State Pension in new ways must ensure that it is sufficiently funded to provide an adequate income for us all in older age. Unfortunately, the State Pension has fallen in purchasing power by €10.24 since January 2019, when compared to the Consumer Price Index of inflation. Next week’s Budget 2022 will be a test of whether the Government is committed to ensuring that the State Pension provides an adequate income that allows people to meet the rising cost of living, not least energy costs that have spiked in recent months” said O’Connor.
Age Action also welcomes the recognition in the recommendation that mandatory retirement ages in employment contracts should not end someone’s employment earlier than the State Pension age, however there also needs to be legal protection for those who want the option of continuing to work beyond the State Pension age on the same terms and conditions, which is already possible for many public servants.
“As expected, the Pensions Commission has recommended raising the eligibility age for the State Pension, despite widespread public opposition to this proposal at the last general election. Age Action remains sceptical of the necessity of this proposal as it is overshadowed by larger funding issues, but we welcome the recommendation to allow access to the full State Pension from age 65 to those who have already worked for 45 years or longer” said O’Connor.