Warning over major deficits in insurance fund

Increased PRSI contributions or reduced pension and social welfare benefits will be needed to address major deficits in the Social Insurance Fund (SIF), an Oireachtas Committee was warned yesterday. An actuarial review of the SIF conducted by consultants KPMG has revealed the shortfall in the fund stood at €1.5bn in 2011.

However, it predicted the deficit would increase to €3bn by 2019 and €25.7bn by 2066 if no corrective actions were taken.

The Oireachtas Education and Social Protection Committee heard the fund had required no Exchequer funding during the period 1997 and 2009. However, it recorded a deficit of €255m in 2008 and the first new Exchequer contribution since 1996 was required two years ago.

An official from the Department of Social Protection, Mary Kennedy told the committee a figure of €324bn highlighted in one recent media report was the combined total of all annual deficits up to 2066. She said the sharp increase in the rate of the shortfall was predominantly due to Ireland’s ageing population, with people’s life expectancy expected to continue to rise.