The pension black hole we are constantly being warned about is about to get darker.
caused by the reaction at the last general election, the Taoiseach Michal Martin draws a line under the controversy about increasing the retirement age and says: “Not on my watch.”
Furor fell from the sky on the 2020 election campaign. Where the parties wanted to talk about the economy and public services, the topic of a potential increase in the retirement age was heard on the threshold.
In the vacuum of uncertainty emerged promises of no change and fiction to have it reviewed by a panel of experts. Fine Gael and their quasi-government colleagues in Fianna Fáil wanted him out of the field.
Now the experts are back, and the Pensions Commission has recommended a retirement age of 67, but not for the next number of years, thus putting off the issue until the end of the decade.
The commission recommended raising the retirement age by three months a year after 2028, reaching 67 in 2031 before increasing to 68 in 2039. In one generation, the retirement age will increase by two years.
The retirement age rose to 66 after a change from 65 in 2014 as the country emerged from the economic collapse. The move has sparked controversy as some 65-year-olds have had to sign up for benefits – often for the first time in their working lives – to claim Jobseeker’s Allowance to fill the gap between retiring at 65 and receiving the State Pension at 66.
The same plan was to increase the retirement age to 67 in 2021, and to 68 in 2028. This schedule was canceled due to the general election frenzy.
Now the new timeline is also parked. The Taoiseach put his boots to the table and kicked.
Fianna Fáil and Fine Gael are shedding their core vote and the base is getting older. You can’t mess with the gray vote.
Martin was a member of the disastrous government that shot the Celtic Tiger.
He well remembers the frenzy of October 2008, when there was an attempt to check the financial status of the medical records of those over 70 years old.
The measure was changed so that it would only affect those with high incomes, but it was the cause. The proposal was rejected after an angry mob of 2,000 pensioners packed St Andrew’s Church in Westland Row, near Leinster House, where ministers were booed and barked at as they tried to calm their anger.
There was a riot of gray voters, and the politicians backed down. The fear of antagonizing older voters remains.
The political power of gray voters is also reflected in the dispute between coalition parties to claim credit for raising the state pension in the upcoming 202 budget, be it in October or September.
However, the bill for the Taoiseach’s latest retirement age figure will have to be paid somewhere.
The retirement time bomb continues to tick. Martin openly admits that additional PRSI contributions will be needed to keep the pension age from rising. To keep the retirement age low, the social insurance fund will need to be replenished, which means that workers and employers will pay more taxes.
Someone is going to have to pay the bills, and it’s young workers who are already burdened by high taxes, a high cost of living and high property values, meaning many will never own their own home. At the same time, a much larger share of pensioners will either be homeowners or have stable housing.
The coming generation will be the first in the century of the state’s existence to be less well-off than the previous ones.
Retirement age will be the issue of the next generation, somewhat like climate change, so why bother?
