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 Post subject: State will face €324bn shortfall over pensions
PostPosted: Wed Sep 12, 2012 9:11 am 
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THE GAP between the State’s future pension and social welfare liabilities and revenues to fund them stands at €324 billion, according to an unpublished report commissioned by the Government, which has been seen by The Irish Times. That figure is almost twice the size of the national debt as it currently stands.

The review of the Social Insurance Fund – the pot into which about €8 billion in pay-related social insurance contributions (PRSI) go to fund a range of benefits – was commissioned by the Department of Social Protection. Last year the fund’s annual shortfall stood at €1.5 billion, or 1.1 per cent of gross national product.

The study estimates that without policy changes, the shortfall will rise to more than 6 per cent annually by the middle of the century. These accumulated deficits up to 2066 amount to €324 billion in 2012 prices.

The report was drafted by audit firm KPMG and was completed in June but has yet to be published.

There is more...

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 Post subject: Re: State will face €324bn shortfall over pensions
PostPosted: Wed Sep 12, 2012 10:04 am 
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gaius wrote:
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The study estimates that without policy changes, the shortfall will rise to more than 6 per cent annually by the middle of the century. These accumulated deficits up to 2066 amount to €324 billion in 2012 prices.

There is more...
I expect I won't have any financial worries in 2066.......

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 Post subject: Re: State will face €324bn shortfall over pensions
PostPosted: Wed Sep 12, 2012 10:08 am 
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it's scare mongering but it's the first step towards compulsory pension contributions for all (it won't be PRSI )
employers, employees and self-employed


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 Post subject: Re: State will face €324bn shortfall over pensions
PostPosted: Wed Sep 12, 2012 10:41 am 
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people have been operating under the assumption that paying tax was a compulsory pension contribution.... it will be hard for some people to adjust for this


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 Post subject: Re: State will face €324bn shortfall over pensions
PostPosted: Wed Sep 12, 2012 10:46 am 
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Yet another confidential government doc "seen by the Irish Times".

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 Post subject: Re: State will face €324bn shortfall over pensions
PostPosted: Wed Sep 12, 2012 11:54 am 
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macannrb wrote:
people have been operating under the assumption that paying tax was a compulsory pension contribution.... it will be hard for some people to adjust for this



There won't be any income tax increases. :shock: All private sector employers and employees will be told that they should be prudent and put money away for a pension (for their employees and for themselves) and will be required by law to do that. At the same time the contributory old age pension will be cut.

This will be after the reduction in pension relieft to 20% so pension industry will be all over the media saying its a good idea.


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 Post subject: Re: State will face €324bn shortfall over pensions
PostPosted: Wed Sep 12, 2012 11:59 am 
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Fortunately, the LTEV of those NAMA ghost estates in Leitrim etc. is €400bn in 2066.

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 Post subject: Re: State will face €324bn shortfall over pensions
PostPosted: Wed Sep 12, 2012 12:27 pm 
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Tyler wrote:
macannrb wrote:
people have been operating under the assumption that paying tax was a compulsory pension contribution.... it will be hard for some people to adjust for this



There won't be any income tax increases. :shock: All private sector employers and employees will be told that they should be prudent and put money away for a pension (for their employees and for themselves) and will be required by law to do that. At the same time the contributory old age pension will be cut.

This will be after the reduction in pension relieft to 20% so pension industry will be all over the media saying its a good idea.


You forgot to add in that the government will make payment to the recipient when they retire and thus retain control of the pension funds in order that they can pay the public sector pensions from it as well, that way it gets them out of a hole at the same time and takes the strain off day to day spending.

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 Post subject: Re: State will face €324bn shortfall over pensions
PostPosted: Wed Sep 12, 2012 12:41 pm 
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evilal wrote:
Yet another confidential government doc "seen by the Irish Times".


It is not confidential. The actuarial review of the SIF was laid before the Oireachtais about a fortnight ago and is therefore public knowledge


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 Post subject: Re: State will face €324bn shortfall over pensions
PostPosted: Wed Sep 12, 2012 8:29 pm 
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TheJackal wrote:
evilal wrote:
Yet another confidential government doc "seen by the Irish Times".


It is not confidential. The actuarial review of the SIF was laid before the Oireachtais about a fortnight ago and is therefore public knowledge


Ah. The report made it sound like they had broken in and stolen state secrets. All the "has yet to be published" stuff.

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 Post subject: Re: State will face €324bn shortfall over pensions
PostPosted: Wed Sep 12, 2012 9:36 pm 
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TheJackal wrote:
evilal wrote:
Yet another confidential government doc "seen by the Irish Times".


It is not confidential. The actuarial review of the SIF was laid before the Oireachtais about a fortnight ago and is therefore public knowledge


Is there a link? Both google and welfare.ie are only giving me the one from five years ago: http://www.welfare.ie/EN/Policy/CorporatePublications/Finance/Pages/ActRevIndex.aspx


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 Post subject: Re: State will face €324bn shortfall over pensions
PostPosted: Wed Sep 12, 2012 9:44 pm 
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€324 Bn... sit back there for a minute and just let the number sink in, forget everything else for a moment...

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 Post subject: Re: State will face €324bn shortfall over pensions
PostPosted: Wed Sep 12, 2012 9:49 pm 
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Open Window wrote:
€324 Bn... sit back there for a minute and just let the number sink in, forget everything else for a moment...


I would not forget everything. In fact I would try to recall that:
-it is an implicit liability, not an explicit one like sovereign debt
-it depends quite drastically on the assumptions you make
-Irish welfare payments do not have automatic inflation indexation, unlike many other countries


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 Post subject: Re: State will face €324bn shortfall over pensions
PostPosted: Wed Sep 12, 2012 9:50 pm 
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Skippy 3 wrote:
Open Window wrote:
€324 Bn... sit back there for a minute and just let the number sink in, forget everything else for a moment...


I would not forget everything. In fact I would try to recall that:
-it is an implicit liability, not an explicit one like sovereign debt
-it depends quite drastically on the assumptions you make
-Irish welfare payments do not have automatic inflation indexation, unlike many other countries


Try harder! :(

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 Post subject: Re: State will face €324bn shortfall over pensions
PostPosted: Wed Sep 12, 2012 9:57 pm 
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shocker!
at 40bn a year that the cost of funding the irish govt would come to 400bn over a 10 year period.

20 years ago, we were looking for 5bn in grants from the EU. where did the inflation come from?

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