Our pension crisis means we’re going to have to work until we drop

POLITICIANS cannot resist expediency. Urgent takes precedence over important. Years of demographic analysis, a Green Paper in 2007 and the launch of the National Pension Framework in March of last year set out our looming dilemma of unfunded pension obligations. By 2050 the ratio of workers to retirees will be 1.8: 1. Currently that ratio is 5.6: 1.

The cost of maintaining the elderly is set to increase from 5.5% to 15% of GDP in four decades.

A series of body blows have hit future pension provision. Charlie McCreevy’s best innovation was establishment of the National Pension Reserve Fund. It’s estimated the current actuarial cost of public sector pension liabilities is equivalent to €108bn. The Special Report on Public Service Pensions in 2009 highlighted that annualised pension payments would rise from €2.4bn currently to €14.7bn over 40 years. Extra life expectancy is the principal culprit. Respective likely lifetime for current retirees is 81 years for men and 84 years for women.