Éamon Ó Cuív criticises pensions report, defends retirement at 66
Éamon Ó Cuív criticised the Commission on Pensions report and argued against raising the state pension age. He defended the option that preserves retirement at 66 and challenged the report's narrow terms of reference and funding assumptions.
Report critique
The speaker said he helped write the report and accused the establishment of trying to rubbish it. He described the Commission on Pensions as having done an honest job within its terms of reference but argued those terms were written to favour a particular outcome and were too narrow.
Comparison of the two packages
He compared package 3, which keeps pension age at 66 (with incremental steps later), to package 4, which raises pension age to 68. He noted exchequer funding was 10% in package 4 and that many contribution changes between packages were small - for example similar rises to reach 10% by 2030, then differences of 0.4% between 2030 and 2040 and 0.8% by 2050 in self-implied contributions. He added employers' PRSI rises were modestly higher under package 3 versus package 4 across the timelines cited.
Concerns about workers' capacity to work longer
He said he knows teachers burned out, care workers with health issues from heavy work, and workers in the building trade who beyond 66 do not feel fit or mentally able to continue working and want to retire. He stated that while some people want to keep working and should be allowed to, it is wrong to tell others they cannot retire at 66 after decades of work.
Funding and auto enrolment issues
He criticised the absence of discussion about auto enrolment and said the Department of Social Protection would not provide requested data. He warned that auto enrolment will require employer and State contributions over decades and argued the State should not commit to long-term auto enrolment savings while refusing to guarantee a basic pension at 66. He urged giving everyone the basic pension at 66 first, then topping up.
Conclusion and recommendation
The speaker argued the differences between the packages do not justify raising the pension age and urged rejecting what he described as a backward approach that prioritises private pensions and avoids transparent funding choices. He called for alternatives to raising PRSI or finding other sums without forcing a higher pension age.
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As somebody who was party to writing this report and along with my colleagues put a lot of effort into this report, I have to say the attitude of the establishment here in trying to rubbish us is absolutely horrendous. The Commission on Pensions did an honest job within their terms of reference. But the terms of reference were well written to try to get one result. I hope to outline why I disagree with the result and I will also come at the very end in a few minutes to why I believe that the terms of reference were too narrow. The first point I have is that I know many, many people, whether they are teachers who are burnt out, care workers who have got health issues from heavy work, people in the building trade, or many, many other workers who, beyond the age of 66, do not believe that they are in fit state or in mental state to continue working and wish to retire. For those that wish to continue working, and I am one of them, I have no problem allowing them. But I think saying to people at 66, sorry, we know you cannot work, we know that you have spent 40 years working, but you cannot retire, is incorrect. Now, there are two packages. When you read the report in detail, there are two choices, and I am going to compare the choices. One choice says that either way, option 4, or package 4 as they call it, said 10% exchequer funding. So that is even Stevens, no difference there. This one choice, three, said no increase in the pension age, and the second one said increase it incrementally over time to 68. So where did the differences in how you raise the money arise? Well, package 3, to make up for giving you the pension at 66 said that between now and 2030 you increase the self implied contribution from 4 to 10%, but package 4 says the exact same thing. So no difference there. Package 3 then says that you increase between 2030 and 2040, the self implied contribution by 2.8% and package 4 says 2.4%, a difference of 0.4%. Package 3 says 0.9% by 2050. On top of that, package 4 says 0.1%. Now even at that rate, which would be 13.7%, the self implied contribution is still much better value on an actuarial basis than the employers and employees put together. So I have no difficulty saying that the people on package 3 will be much better getting the pension at 67, for the differences, for the differences which are quite small, that I have outlined here. So the other significant difference is, in the employers ease increase, and package 3 says go up by 0.2% by 2030, and package 4, the one that you have the pension age at 68, says no increase. And then by 2040 it is 1.55% on package 3 and 1.35% by pension age 4, and then it goes up 0.9% versus 0.1% again in the last 10 years up to 2050. Now, the only part of this that I think there might be alternatives to, you have two choices, put up the PRSI and give the pension at 67, or find alternative sums. And this is where I really run into trouble. There has been no mention of auto enrolment here. Now, I keep putting down parliamentary questions, and for some reason the Department of Social Protection do not want to give us the data. But basically, auto enrolment is coming in in the next year or two, according to the government. And when you are in auto enrolment, what will happen is, the employer will put in money, the employer will put in money, the employer will put money in, and the State will put money in to give you a pension maybe 40 years hence. So, if the State is saying we can find all of this money to put money in for 40 years, 30 years, 20 years hence, whenever you will get to pension age, no, we have all so much money we can put it in, no. But we cannot pay you the pension at 66 out of the State pension. Now, since I am somebody who wants to give everybody the basic, before I start topping up their pension, to me the bottom line is, give everybody the basic at 66, and then top up with whatever is left. What the government are trying to do by subterfuge, by avoiding the auto enrolment, is do it backwards. They say we are going to start and put the money on committed to auto enrolment first, and we are determined to put up the pension age because it suits them, and it suits the system, and because it suits the private pension industry. Thank you very much. Thank you very much.
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