Airline offers a taste of pension pain to come

The Aer Lingus pension dispute is but a foretaste of things to come.

Early last week, a peer of the realm in Britain called for “financial penalties for pensioners who were not contributing to society so that they could avoid being a burden on the state”.

He was speaking to a parliamentary committee investigating the impact of the ageing population. He exacerbated the situation by effectively comparing pensioners to job-shy unemployed: “We are now prepared to say to people: ‘If you do not look for work you don’t get benefits, so if you are old and you are not contributing in some way or another maybe there is some penalty attached to that.’ ”

What made the situation so ironic is that the “gentleman” who made these statements, Lord Bichard, a former head of the benefits agency, retired at age 54 on a pension of £120,000 (€150,000) per annum.

Bichard is representative of many of those who occupy the seats of government, the public sector, the banks, and the upper echelons of the business community.

The “great unwashed” that is the vast bulk of taxpayers are merely cannon fodder in the eyes of those who see themselves as our betters. They have entitlements the rest of us can only dream about — yet we must pay for theirs.

We will surely not be surprised of news that the pension pots required to pay the current Government members, should they hold on until the end of their term, is a whopping €36m.

Since government puts nothing away to pay for future pensions and since the pension fund it did manage to salt away a few years ago during the boom has been ransacked to pay off failed banking gamblers, the taxpayers of the future are in for a terrible beating as their pay packets and what assets they might have accumulated are ransacked to pay off their masters.

Most of us would be happy with an annual pension of, say, the €80,000 per annum that Pat Rabbitte is projected to receive, or the €45,354 that Leo Varadkar will get for his eight years as a TD and a concurrent five years as a minister.

But, unfortunately, we will not get a pension even remotely similar to what these guys will get. Nor will we get a pension after eight years on the job. We will have to wait for 40 years and even that is now being challenged as, by 2021, we will have to work until 68 to get a State pension.

Aer Lingus employees are about to make their feelings known in the only way possible. Their pension scheme is almost €1bn in deficit. Nobody wants to know, least of all the State, which is a minority shareholder and former owner of the company.

The employees have paid in their millions but they will never even recoup what they put in. Yet the pension investors will continue to reap their extortionate fees year in, year out, irrespective of how much they lose. Up to a third can be lost in fees alone.

The elite of this country see themselves as above all of this groveling in the veritable dirt to make a half-decent living in retirement. Not for them is there any sense of responsibility or accountability. We even pay them for failure.

Witness the largesse bestowed on the men and women who ran our banks into the ground. One former CEO gets almost €500,000 a year and another gets almost €600,000.

It’s time to put a cap on pensions. A maximum of €60,000 per annum and any pension contribution paid above that should be given zero tax relief. Any pension that pays out over €60,000 a year should be heavily taxed, way above standard levels.

It’s no wonder we are heading for a pensions timebomb when the pensions of our senior public servants and politicians bear no relation to what should happen in the real world.

It looks like Nero is getting ready to play his fiddle again.

© Irish Examiner Ltd. All rights reserved

Irish Examiner live news app for smartphones lets you quickly access breaking news, sport, business, entertainment and weather. appstoregoogle play
Irish Examiner ePaper app gives you the entire newspaper delivered to your phone or tablet for as little as 55c a day. epaper
Home

More From The Irish Examiner