Ireland is set to rise the age to be able to receive a State pension but a parliament committee recommends it should be maintained at 66.
A parliament committee responded to a report from the Commissions of Pensions and had a very different approach. It recommended to stay the pension age at the current level instead of gradually increasing it.
The Committee on Social Protection considers in its report considers it would not significantly improve finances of the social security fund.
During legislative elections in 2020, the political party Fianna Fáil promised it would postpone the legislation that would force people to retire at an older age. Age retirement became a hot debate during the campaign.
In 2014, the Irish government led by the Fine Gael labor party increased the retirement age from 65 to 66. The pension age was set to increase to 67 in 2021, and 68 in 2028.
Fianna Fáil won the most seats and made a coalition with the former ruling party Fine Gael.
Last October, Minister for Social Protection Heather Humphreys said the report of the Commission on Pensions had “unambiguously established that the current State pension system is not sustainable into the future and that change is needed”.
It recommended that the State pension age should gradually increase by three months each year commencing in 2028. The state pension age would reach 67 in 2031 and then would increase of three months every other year. People could retire and receive a pension at 68 years old in 2039.
It pointed out that costs for financing the State pensions would significantly increase, “of the order of 65% by 2030″. The entire social insurance fund would be necessary to pay for the State pensions by 2040 if nothing changes.
Unconvinced by the impact of an increase in the pension age
However, the parliament Committee on Social protection took the opposite stance on February 2. Among 13 recommendations, it advocated for maintaining the state pension age at 66, its current level.
The Committee “remains unconvinced that the gradual increase in the pension age will have a meaningful impact on the fiscal position of the Social Insurance Fund“.
It argued that “many people aged 66 or over could not reasonably be expected to continue working due to the physical and mental stress that their jobs have caused over many years”.
The committee included members of all political parties.
“By 2030 we will be experiencing an annual shortfall each year of €2.3bn (US$2.6bn) in the fund that pays for this”, said Minister for Finance Paschal Donohoe, member of Fine Gael, on RTE Radio.
In 1991, there were 5 working age people for every pensioner. There will be only 3.5 working age people for every pensioner in 2031 and 2.3 by 2051.
The prime minister of Ireland Micheál Martin, from Fianna Fáil, said he would keep an open mind about the matter.
The workers union SIPTU welcomed the recommendation.