Eighty three per cent of pension advisors are confident that the Commission on Pensions will recommend to increase the age at which people receive their State pension to 67 or 68.
Meanwhile, 65 per cent believe that the Government will subsequently act on the Commission’s recommendation.
These are among the primary findings of a new survey of over 100 pension advisors undertaken by leading pension trustees, Independent Trustee Company (ITC). The survey sought to gain insight into attitudes towards the upcoming pension policy changes that look set to take centre stage over the coming months.
Glenn Gaughran, head of Business Development And Marketing at ITC said: “Last February, pensions became a thorny election issue and consequently, the Government chose to defer the planned increase in pension age to 67 until it received a report on the matter from a newly established Commission on Pensions.
"With the recommendations from the Commission due at the end of June, the issue will again move up the public agenda. Indeed, our survey finds that the vast majority (83 per cent) of pension advisors expect that the Commission’s recommendations will fall in favour of a move to a higher age of entitlement for the State pension — something which has been vehemently campaigned against by certain bodies, while others parties have voiced huge support for such a development.”
Reform
The ITC survey also found that almost two thirds (65 per cent) of responding pension advisors believe the Government will decide to proceed with the higher pension age if recommended by the Commission, though the remaining pool of survey respondents believe that the Government will either decide against the move or will find some way to indefinitely defer the decision.
Mr Gaughran said: “It stands to reason that something will have to give in order to ensure adequate pension provision for future generations – with the majority of pension advisors believing that increasing the pension age will be the likely step taken by Government towards this objective.
"People are living longer and life expectancy is increasing, leaving a corresponding fiscal challenge for our current and future taxpaying generations to carry the burden of pension provision for more senior ones. Eurostat[1] places the average life expectancy for Irish males at 81 and at 85 for females, meaning that persons could be in receipt of their pension for anything from 15 years to 20 years plus. Reform will be necessary to secure sufficient resources to match our increasing longevity.”
Confusion
When it comes to clarity on the issue of pension reform, the overwhelming majority of survey respondents believe all the discussion in the media from various bodies and political entities around the State pension age and possible changes to it is confusing the general public, particularly those approaching retirement.
Mr Gaughran said: “It’s no secret that pensions can be a complex arena for people to get their head around. On top of that, pension reform, and particularly any perceived delays to pension entitlements, is an emotive subject for many people. The public undoubtedly want clarity on this topic, something that 96% of our survey respondents similarly felt strongly about – there has been an abundance of media coverage and discussion to date, but has this led to more confusion?
"The question of increasing the pension age is a very sensitive one for those approaching or reaching retirement, and undoubtedly creates great uncertainty and indecision. Whatever decisions are to be made at a national level, the fact remains that the Commission and the Government must work to address the sustainability of State pension provision in a way that balances the needs and entitlements of Ireland’s retirees with our economic capacity and labour resources over the longer-term.”
