SIPTU says raising age will make no significant contribution to cost of State pension scheme
SIPTU has said that increasing the pension age will make no significant contribution to the cost of the State pension scheme. It has also called for a ‘statutory right to remain’ to allow employees to stay in their jobs up to and beyond the pension age and for fair treatment of carers and workers in arduous jobs.
In its submission to the Commission on Pensions, the union has argued that the pension age should not be increased from 66 and that raising the age will make no significant contribution to the cost of the State pension scheme.
SIPTU economist, Michael Taft said: “There is no doubt that the cost of pensions will increase in the future. However, the debate over pension sustainability has been distorted by the almost exclusive focus on the pension age. There is no evidence that increasing the pension age will significantly reduce costs. Any fiscal benefit will be marginal compared to the high social cost that increasing the pension age will impose on a large number of older people.
“There should also be flexibility in the system to allow people to access pensions early, as applies in other EU countries. Two key categories are those working in arduous jobs — jobs which are physically or mentally demanding. Requiring them to work to the present pension age of 66 represents a risk to their health and life quality.
“There are many employees who want to continue working later in life but are prevented from doing so by age-discriminatory contracts which require them to retire before reaching the pension age. This can lead to a significant loss of income and a deterioration in living standards. SIPTU proposes an amendment to existing legislation to ban age-discrimination in work contracts which would allow employees to work up to the pension age and potentially beyond.”
In its submission, SIPTU has called on the Commission to investigate the real drivers of pension sustainability.
“The Irish Fiscal Advisory Council and the Department of Finance project that by the end of the decade the Irish economy will be entering into a lengthy 20-year period of ultra-low growth. We will not have such experienced growth rates since the 1940s and 1950s. If we don’t start addressing that now through investment in our economic infrastructure, education and skills and family supports, the pension age will be the least of our problems.
“We also need to increase revenue into the Social Insurance Fund. Employers’ PRSI, which is the lowest in the EU, will have to rise incrementally over the next 20 years. If we don’t increase our revenue stream we will undermine pensions sustainability and risk substantial cuts to public services and investment,” the submission argues.
SIPTU is calling for carers, mainly women, to be allowed to claim up to 20 years of pension credits for their time caring for children, elderly and family members with disabilities.
The Union also recommends that pension payments be increased to 34% of the average wage in the short-term, as promised by the Government in the National Pension Framework.
“The Commission should not sacrifice older people’s life quality in retirement in pursuit of ineffectual policies such as increasing the pension age. Ireland will have a young population relative to Europe for at least two decades,” Michael Taft added. “There is no argument in social equity or fiscal necessity to increasing the pension age. However, there is a need to provide people choice in a fairer and flexible pension system, to pursue policies that can have a real impact on pension sustainability and ensure everyone can maximise their life opportunities in retirement.”
