Irish workers still reliant on State pension scheme
Irish people are over-reliant on the State pension and as a result are putting huge pressure on the entire pension system, a new report has found.
Pensions firm Mercer claims that workers need to put more money into a private pension scheme instead of expecting the State payout to be there when they finally retire.
Its survey ranked Ireland 20th out of 25 countries for the strength of the pension system here.
Mercer said it measures pensions systems against more than 40 indicators under the including adequacy, sustainability and integrity.
Mercer’s Mairead O’Mahony claimed an “auto-enroll” system would help reduce the risks in the system at present.
“The introduction of an auto-enrolment system would serve to increase participation in private pension saving and would be a strong step in the right direction,” Ms O’Mahony said.
“However, we need to ensure that this is matched by a commitment to improve plan engagement to ensure that members have a clear understanding of the savings they will need for their retirement,” she said.
Denmark was named as having the most robust pensions system. The results of the report may be met with a shrug in some quarters given Mercer’s role as a pensions manager.
However, it does throw the spotlight on the ongoing worry that younger people in particular are not saving for retirement and may end up relying on a State pension that could be worth substantially less in real terms in 30 or 40 years’ time.
While Mercer is encouraging workers to manage their pensions more closely, a new report from the Irish Institute of Pensions Management (IIPM) may encourage more people to work in the pensions sector itself.
The pensions trading body claims that nearly two-thirds of qualified pensions staff are making more than €55,000 a year and some 12pc of workers are making more than €125,000 per year.
In the past five years, 61pc of IIPM members claim to have seen their total compensation packages improve, while 26pc reported no change. Just 14pc saw a decrease in pay.
In addition to well-paid roles, IIPM members are said to enjoy strong benefits. Some 87pc of respondents said they receive pension contributions as part of their remuneration, while a company car or car allowance was provided in 41pc of instances.
Health insurance cover was also paid to 37pc of IIPM professionals and share incentive programmes formed part of compensation and benefit packages in 24pc of instances last year.
IIPM president Rose Leonard said the survey showed that “members at all levels continue to be in high demand among employers”.
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