Irish pensions need urgent reform, industry specialist says
Irish pensions, which lag in the international rankings when it comes to sustainability, need urgent reform as the ratio of workers to retirees is set to fall dramatically over the next three decades, according to human resources consultancy Mercer.
While the 2019 Melbourne Mercer Global Pension Index (MMGPI) , published on Monday, has found that Ireland stands in first place for adequacy of expected pension benefits, given the “comparatively generous” State pension, it only ranks 27th when it comes to sustainability.
The weak sustainability reading reflects the low level of occupational pension coverage – of below 50 per cent – in Ireland and that an ageing population will see the ratio of workers to retirees falling from 5:1 today to 2:1 by 2050, leaving fewer people to fund State benefits, according to Mercer. Ireland’s overall pension system stands in 11th place out of 37 countries assessed for the index.
“Ireland’s relatively high ranking masks an underlying imbalance. It’s clear that our comparatively generous State pension will come under increased strain as the population continues to age rapidly between now and 2050,” said Caitriona MacGuinness, head of defined contribution pensions at Mercer in Ireland.
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