I cannot believe any Irish politician is suicidal enough to increase the savings rate in the Irish economy.
And it IS that simple. And this IS why this problem is unfixable.
Because it will upset the voters or because it will slow growth?
Of course, this will presumably apply only to the private sector. The Public sector will continue to enjoy their unfunded DB scheme I presume.
I don’t see them doing anything for a few years but my guess is that the main effect will be to make employer pension contributions compulsory- probably another 5% on top of employers PRSI.
For many big existing companies this won’t be a problem in itself - they’re probably already making this contribution to pensions. But for smaller employers it’ll be a problem.
Compulsory or opt out pensions won’t help higher paid workers who’re saving to their pension (it will hurt them if the government bring in a flat 30% tax relief rate to sweeten the deal for lower paid workers - which I suspect they would) and it won’t help lower paid workers who simply can’t save enough to build up a useful pension. The current system in my view can be made work for better than average paid staff who can make the sacrifice to load up their pension. A major alteration could mean we’ve a pension system that works for almost no one - a fair system I suppose.
If this idea makes it to reality Burton needs to be asked questions like how large a fund could a 40 year old 25k earner hope to build up, what level of lump sum and annuity it would provide.
Because it is short term pain for long term gain.
Assuming Ireland is not the first country to confront such a pension time-bomb, what countries should we be examining at this point ?
Expect this to be implemented in about 20 years
Expert group will draw up universal pension scheme for all private sector workers
F**king expert groups, pension industry insiders, senior civil servants, someone from Big 4 law/accountancy firm, someone from the central bank and a union hack.
We have an ticking bomb and serious hard choices are needed
Channel 4 now for how to blow your pension.
Totally didn’t realise they ll get to access 100pc of pension pot over 55
Joan Burton warns on importance of pension reform (but engages in more long fingering).
If she doesn’t personally enrich herself from bringing in “compulsory” pensions; she’s a naive, gullible fool.
The pension companies know she’s a dead woman walking and if they can influence/frighten her into bringing in more stealth taxes “for the good of the people”, they’ll have hit the jackpot.
FF tacked on USC to the payslip.
I guess Labour will be tacking on a UPC (universal pension charge)?
Will working people have anything left to do anything without “the State” having first dibs?
This has nothing to do with “the State” taking money, it’s about some combination of (a) reducing the requirement on future current taxpayers to fund future current pensioners in order to deal with a demographic problem, and (b) enriching the pension industry through fees on accumulated compulsory contributions.
Will the people who have these extra lines at the bottom of their wage slips be the ones benefiting in 30 years’ time? Can you trust a state that is so young and has a history of economic lunacy 30 years into the future?
Who is to say that the scheme (and yes, it sounds like right old scheme) won’t be politically manipulated and go like the NPRF?
All for the benefit of “the people” eh?
It’s a communist mindset that will lead to huge inefficiencies and the socialization of losses.
How about telling everyone that social welfare will be phased out completely over 20 years? Much cheaper and more effective than “incentivising” wage slaves (many of whom already have private pensions) to agree to more tax, all so the “disadvantaged” easy living folks can keep their city centre townhouses and maintain their interests in reproducing early and often.
Joan Burton is a dangerous idiot.
You don’t have a private pension then?
The Punt: Burton and the decade of dithering on pensions
Of course not. He’s invested everything in bitcoins.
If his claim is true (and I actually believe he was nuts enough to do it) then his pension has increased in value over 3,000% since then. From about $6 to over $200 now each. He’s quite possibly a millionaire!