Ireland's pension liabilities reach €608bn

Liabilities in Government-managed schemes totalled €508.8bn, or 156% of GDP, at the end of 2018. 

The figures come in the wake of the Government's attempt to tackle the gap between the official retirement age and people retiring from work a year before that. File photo: PA

Ireland’s pension liabilities totalled just under €608bn at the end of 2018, with state schemes accounting for almost 60% of that amount, official estimates have suggested.

According to Central Statistics Office (CSO) calculations, state pension schemes amounted to €359.2bn or 59% of the total liability; public service defined benefit schemes made up 25% of the total liability at €149.6bn; and private pension schemes equated to 16% of the total liability at €99.1bn.

Pension liabilities refer to funds that a state, government, or company has to account for if it is to make pension payments in the future, or the difference between the total amount retirees are to receive and the money on hand to make those payments.

A pension surplus would be where the state or firm has more money on hand than it needs to pay pensions in the future.

CSO statistician Ciara O'Shea said that, like many countries, a significant portion of Ireland's liability relates to government-managed schemes which totalled €508.8bn, or 156% of GDP, at the end of 2018. 

State Pension schemes account for 59% of the total liabilityhttps://t.co/fsbqx4vAVm #CSOIreland #Ireland #Pensions #PensionLiabilities #Earnings #Employment pic.twitter.com/gsCFXSwQkJ

— Central Statistics Office Ireland (@CSOIreland) February 10, 2021

Just over two-thirds, or €359.2bn, of the government-managed schemes’ liabilities relate to the state pensions, defined as the State Pension (Contributory), the Widow's, Widower's or Surviving Civil Partner's (Contributory) Pension, and the Invalidity Pension, she said.

The remainder relates to public service defined benefit occupational pension schemes, according to Ms O'Shea.

Private occupational pension schemes liabilities were estimated to be €99.1bn at the end of 2018, or 21% of the total. 

Three-fifths, or €58.7bn, of this relates to private occupational defined benefit schemes and the remainder, some €40.4bn, relates to private occupational defined contribution schemes, she said.

Ms O'Shea added: 

Ireland’s pension liability is low in comparison to some European countries, illustrating the relatively young population. 

"The total accrued-to-date liability of pension providers in Switzerland was €1.97bn at the end of 2017, equating to 316% of Swiss GDP. In Latvia, the liability was €59bn or 218% of GDP."

The figures come in the wake of the Government's attempt to tackle the gap between the official retirement age and people retiring from work a year before that.

Social Protection Minister Heather Humphreys said earlier this week that those aged 65 will no longer have to sign on to receive social welfare income support in the year between retirement and qualifying for the state pension.

Sinn Féin leader Mary Lou McDonald said the measure did not solve the issue.

It is "in effect, a jobseekers payment of only €203 a week" or a "loss of €45 euros a week" when compared with the state pension, she said.

"This is a real blow for 65-year-olds who will rely on a decent pension to get by," she added.