Pension age fudge just another reason for the young to emigrate – The Irish Times


The phrases “pensions time bomb” and “demographic time bomb” have been used with regularity for almost 50 years in western Europe.

In his sweeping survey of postwar Europe, historian Tony Just suggested that by the late 1970s, the European welfare state was “starting to count the cost of its own success”.

The challenge of supporting retirement of the postwar baby boom generation approaching middle age was acute because of reductions in retirement age: “Of West German males aged 60-64 for example, 72 per cent were working full time in 1960; twenty years later, only 44 per cent of men in this age group were still employed. In the Netherlands the fall was from 81 per cent to 58 per cent … moreover, being also the best-nurtured generation ever, they would almost certainly live longer”.

Ireland’s youthful population meant that in the early 1980s the population replacement ratio of 2.1 children per woman was still being met, but by the 1990s warnings of the “time bomb” grew louder.

In 1995, the minister for social welfare Proinsias de Rossa promised he would “fully decommission the so-called pensions time bomb” while enunciating a positive message about continued economic growth and society’s ability to pay for pensions. The context for his remarks was an assertion that year from the Irish Association of Pensions Funds (IAPF) that by 2020 there would be one pensioner for every four people working; in 1995 there was one for every five workers.

One 83-year-old Galway pensioner at the protest half-joked that he told his children he was coming to the protest so that they would not end up paying for his funeral

The IAPF was not far off the mark with that prediction: the Report of the Commission on Pensions notes that currently, “this ratio is about 4.5 working age people to every pensioner. By 2031, this is projected to fall to 3.5 working age people to every pensioner and by 2051, to 2.3 working age people to every pensioner.” Meanwhile, life expectancy has increased by approximately five years in the last two decades and is expected to increase by a further three years in the next two decades.

Politically conscious and likely to vote, the baby boomers (and some members of older generations) demanded creative responses, framed in the wider context of the balance between rights, responsibilities, civic solidarity, and choice.

This “grey power” could also produce militancy about protecting hard-earned entitlements. A memorable protest here in October 2008 witnessed 15,000 older people labelled “grey panthers” mobilising after the proposed removal of the automatic entitlement of the over 70s to medical cards. This show of “sliver solidarity” was organised by the Irish Citizens Senior Parliament. One 83-year-old Galway pensioner at the protest half-joked that he told his children he was coming to the protest so that they would not end up paying for his funeral.

There was a fear that they were being left behind; Sylvia Meehan, a member of the National Council of Ageing and Older People was vocal about the degree to which the 2008 protest was about wider community solidarity and a “country still believing in family” which involved treating older people with dignity. But what happens to those much younger when the aspiration for choice, flexibility and decent pension payments and welfare entitlements meets fiscal and demographic reality?

Such commissions … involve the public service of experts in the relevant areas who then have to witness their politically tricky conclusions being quickly dismissed and even derided

There are two central issues identified by the Pensions Commission report that apply not only to the pensions debate, but to a whole host of contemporary societal challenges: “the community expectation of certainty” and “the values of social solidarity”. To try to provide the former, the latter tends to be sacrificed because of political short-termism. The recent report of the commission on taxation and welfare (500 pages) also refers to solidarity and what it terms “a wider social contract — the set of rights and mutual obligations that come with living in Ireland”.

Such commissions are, of course, a product of political heat; they temporarily take the issue off the government’s table. They also involve the public service of experts in the relevant areas who then have to witness their politically tricky conclusions being quickly dismissed and even derided, including when it comes to taxing inheritance, which Garret FitzGerald, as both economist and politician, often noted was a great perpetuator of inequality in Ireland.

Politicians insist that the voters in 2020 made their feelings clear about the pension age and that for ministers to ignore that is impossible. A new pension flexibility will understandably be welcomed by many, but are both politicians and their voters also eliding the wider issue of social solidarity when it comes to the costing of the new pension proposals? A younger generation is being burdened with responsibility for a reluctance to follow expert advice commissioned by the Government at the same time when they are facing a myriad of challenges relating to housing and standard of living not to mention existential climate threats. When it comes to the “expectation of certainty” they are already severely disadvantaged and can surely be forgiven for castigating this country as no country for young people.



Read More: Pension age fudge just another reason for the young to emigrate – The Irish Times

2022-09-22 21:02:23

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