Pension

Padre_Pio

the butcher wrote: »

Demographics don't look too promising in 30 years time based on past and current birth rates...there's a pensions timebomb that keeps being pushed down the road, will all this be addressed by 2040/2050? Will these tax incentives still be as "juicy" when it comes to cashing out later on? No guarantee from what I can see.

No guarantee, but what's the alternative?

dublin49

Padre_Pio wrote: »

No guarantee, but what's the alternative?

I can see a time when the state pension will be means tested,it will be argued that those with private pensions received generous tax relief from the state so the state cannot afford to pay them a public pension without reference to their other sources of income.It will be tough to introduce as the grey vote is to be feared(of which I am a member).The Government will need some cover on this either from an EU directive or an all party commission or the peoples forum,cant remember its name.

Cute Hoor

Midlands2007 wrote: »

The 12000 from other income, does this have to be from another pension source? Say by age 64 you wanted to work part-time and top up from ARF would this income qualify or would 63,000 of pension have to be tied up in an AMRF? Anywhere I read says 12,000 has to be another pension income.

I'm no expert on this but this is my understanding. When you reach retirement, you can only put your money into an ARF if you have a guaranteed pension income for life of at least €12,700, if you don't have another pension or your pension is less than €12,700 then you can put it into an AMRF. My understanding is that you can only withdraw any investment growth from your AMRF whereas you can withdraw any % you want from an ARF. An AMRF automatically becomes an ARF when you reach 75. That's my understanding but don't take my word for it.

Cute Hoor

dublin49 wrote: »

I can see a time when the state pension will be means tested,it will be argued that those with private pensions received generous tax relief from the state so the state cannot afford to pay them a public pension without reference to their other sources of income.It will be tough to introduce as the grey vote is to be feared(of which I am a member).The Government will need some cover on this either from an EU directive or an all party commission or the peoples forum,cant remember its name.

I thought the pension (non-contributory) was means tested already, is this not the case

dublin49

Cute Hoor wrote: »

I thought the pension (non-contributory) was means tested already, is this not the case

not currently

Bobeagleburger

dublin49 wrote: »

I can see a time when the state pension will be means tested,it will be argued that those with private pensions received generous tax relief from the state so the state cannot afford to pay them a public pension without reference to their other sources of income.It will be tough to introduce as the grey vote is to be feared(of which I am a member).The Government will need some cover on this either from an EU directive or an all party commission or the peoples forum,cant remember its name.

It'll take a brave government as it'll sink whatever government even considers it.

Cute Hoor

dublin49 wrote: »

not currently

From citizensinformation.ie - are they incorrect

The means-tested State Pension (Non-Contributory) is a payment for people aged over 66 who do not qualify for a State Pension (Contributory) or who only qualify for a reduced contributory pension based on their insurance record.

dublin49

Cute Hoor wrote: »

From citizensinformation.ie - are they incorrect

The means-tested State Pension (Non-Contributory) is a payment for people aged over 66 who do not qualify for a State Pension (Contributory) or who only qualify for a reduced contributory pension based on their insurance record.

In fairness I was talking about the contributory State pension which I presume most qualify for,in some form ,I think you need 520 contributions which is 10 years working .Maybe the non contributory is different?

dublin49

The State Pension (Contributory) is paid to people from the age of 66 who have enough (PRSI) contributions. It is sometimes called the old-age pension.

The State Pension (Contributory) is not means tested. You can have other income and still get it.

Cute Hoor

dublin49 wrote: »

In fairness I was talking about the contributory State pension which I presume most qualify for,in some form ,I think you need 520 contributions which is 10 years working .Maybe the non contributory is different?

Totally different. While nothing is impossible obviously, the contributory pension cannot be means tested as you have paid for it throughout your working life via PRSI contributions

Cute Hoor

dublin49 wrote: »

The State Pension (Contributory) is paid to people from the age of 66 who have enough (PRSI) contributions. It is sometimes called the old-age pension.

The State Pension (Contributory) is not means tested. You can have other income and still get it.

They are both old age pensions, one you get because you have no/limited means, the other you have paid for all your working life via PRSI contributions

dublin49

dublin49 wrote: »

I can see a time when the state pension will be means tested,it will be argued that those with private pensions received generous tax relief from the state so the state cannot afford to pay them a public pension without reference to their other sources of income.It will be tough to introduce as the grey vote is to be feared(of which I am a member).The Government will need some cover on this either from an EU directive or an all party commission or the peoples forum,cant remember its name.

Yes. We have to recall that in 1889 when Germany became the first nation in the world to introduce an old age pension, designed by then-Chancellor Bismarck, the retirement age was fixed at 70. And this was on the basis that people of that age were assumed to be "disabled from work by age and invalidity".

The USA subsequently set 65 as the retirement age for social security etc purposes and this became the norm from the early 1900s onwards.

Ideally I would like to see a means-tested solution that acknowledges that people are able, and have the right, to work on into their '70s in many fields, and also takes account of life expectancy now versus 1900.

cooperguy

Cute Hoor wrote: »

I'm no expert on this but this is my understanding. When you reach retirement, you can only put your money into an ARF if you have a guaranteed pension income for life of at least €12,700, if you don't have another pension or your pension is less than €12,700 then you can put it into an AMRF. My understanding is that you can only withdraw any investment growth from your AMRF whereas you can withdraw any % you want from an ARF. An AMRF automatically becomes an ARF when you reach 75. That's my understanding but don't take my word for it.

Can you split your pot into a section enough to provide the 12k and the rest goes into an ARF. Can you account for the state pension which would give you the majority of it?

Cute Hoor

ecoli3136 wrote: »

Ideally I would like to see a means-tested solution that acknowledges that people are able, and have the right, to work on into their '70s in many fields, and also takes account of life expectancy now versus 1900.

The obvious way imo to deal with this pension timebomb would have been to gradually increase the retirement age to reflect the ongoing increasing life expectancy, flagged well (10 years?) in advance so that everybody would be clear about what their pension age was going to be. Something like the outgoing government tried, but they did it in such a typically hamfisted way that it blew up in their faces, became an election issue, was backtracked on, and will be virtually impossible to re-introduce as a result. Needs to be done though imo.

The J Stands for Jay

the butcher wrote: »

Demographics don't look too promising in 30 years time based on past and current birth rates...there's a pensions timebomb that keeps being pushed down the road, will all this be addressed by 2040/2050? Will these tax incentives still be as "juicy" when it comes to cashing out later on? No guarantee from what I can see.

The pensions time bomb is mainly around the state pension and the gigantic, unfunded civil service pensions. Save in a pension now and don't expect anything from the state.

Cute Hoor

cooperguy wrote: »

Can you split your pot into a section enough to provide the 12k and the rest goes into an ARF. Can you account for the state pension which would give you the majority of it?

Not sure on the first bit and I don't want to go spoofing. The state pension will give you in excess of €12700, that's why it's that figure as I understand it, so the state pension covers that requirement.

The J Stands for Jay

Cute Hoor wrote: »

The obvious way imo to deal with this pension timebomb would have been to gradually increase the retirement age to reflect the ongoing increasing life expectancy, flagged well (10 years?) in advance so that everybody would be clear about what their pension age was going to be. Something like the outgoing government tried, but they did it in such a typically hamfisted way that it blew up in their faces, became an election issue, was backtracked on, and will be virtually impossible to re-introduce as a result. Needs to be done though imo.

To be entirely fair, it'd need to be announced about 40 years in advance.

The J Stands for Jay

cooperguy wrote: »

Can you split your pot into a section enough to provide the 12k and the rest goes into an ARF. Can you account for the state pension which would give you the majority of it?

The State pension pretty much covers that off. You can either put 63.5k in an AMRF, or you can buy an annuity to bring you up to 12k per annum along with the state pension.

Cute Hoor

McGaggs wrote: »

To be entirely fair, it'd need to be announced about 40 years in advance.

Yea maybe, but it needs to be done though imo.

dublin49

All my peer group have retired or are talking about retirement well before 65 while there is constant reference in media about people working into their 70's.

The J Stands for Jay

Cute Hoor wrote: »

Yea maybe, but it needs to be done though imo.

Something needs to be done. I wonder if just keeping the pension at its current amount, and never increasing it would do enough cost wise. It would seem to be something that would fly more easily from a political point of view. The pension is only at its current high level because of large increases just before an election.

Geuze

McGaggs wrote: »

The pensions time bomb is mainly around the state pension and the gigantic, unfunded civil service pensions. Save in a pension now and don't expect anything from the state.

https://www.cso.ie/en/csolatestnews/presspages/2021/estimatesofirishpensionliabilities2018/

Estimates of Irish Pension Liabilities 2018

State Pension schemes account for 59% of the total liability

Total accrued-to-date liabilities of occupational pension schemes in Ireland were estimated at 186% of Gross Domestic Product (GDP) or 306% of modified Gross National Income (GNI* ) at the end of 2018

The total liability equated to €607.9bn, of which:
(1)State pension schemes amounted to €359.2bn
(2)Public service defined benefit schemes made up 25% of the total liability (€149.6bn)
(3) Private pension schemes equated to 21% of the total liability (€99.1bn)

cooperguy

McGaggs wrote: »

The State pension pretty much covers that off. You can either put 63.5k in an AMRF, or you can buy an annuity to bring you up to 12k per annum along with the state pension.

The main gap being if you retire at 65 and state pension doesn't kick in till 68. Does access to a lump sum cover the requirement while waiting for state pension to kick in

Jim2007

dublin49 wrote: »

I see investment experts Davy Stockbrokers specilaizing in retirement planning were fined 4 million yesterday.Its more than bar stool experts you would want to look for.

Except it was nothing to do with pensions... do you apply the same logic to leaving your house everyday - better not as someone had a crash last week, your doctor - there was that case in South Africa, so better avoid doctors....


It's a bit like anti-vaxxers, I really could not care what you do, except for the false hoods you propagate can have serious consequences for others.

The J Stands for Jay

Geuze wrote: »

https://www.cso.ie/en/csolatestnews/presspages/2021/estimatesofirishpensionliabilities2018/

Estimates of Irish Pension Liabilities 2018

State Pension schemes account for 59% of the total liability

Total accrued-to-date liabilities of occupational pension schemes in Ireland were estimated at 186% of Gross Domestic Product (GDP) or 306% of modified Gross National Income (GNI* ) at the end of 2018

The total liability equated to €607.9bn, of which:
(1)State pension schemes amounted to €359.2bn
(2)Public service defined benefit schemes made up 25% of the total liability (€149.6bn)
(3) Private pension schemes equated to 21% of the total liability (€99.1bn)

I'd forgotten about the DB schemes.

Jim2007

Padre_Pio wrote: »

No guarantee, but what's the alternative?

We know what the alternative is and are already on the road, just like every other EU member state....


Ireland will like every other member state move to a version of the three tiered system:
- First Pillar: A state contributor pension, probably covers 3 or 4 months of a pensioner's annual living expenses
- Second Pillar: A contributory pension from employment funded by the employee and the employer the main source of income in retirement
- Third Pillar: Private savings accumulated over they pensioner's working life with tax incentives.


The auto-enrollment is the start of the second pillar. I suspect the only way it is going to get through in Europe, is for it to be made an EU requirement, that way all the countries involved, not just Ireland can say: hi it's an EU requirement, sorry no choice.

dublin49

Jim2007 wrote: »

Except it was nothing to do with pensions... do you apply the same logic to leaving your house everyday - better not as someone had a crash last week, your doctor - there was that case in South Africa, so better avoid doctors....


It's a bit like anti-vaxxers, I really could not care what you do, except for the false hoods you propagate can have serious consequences for others.

I was making the point that the Banking / investment industry in this country has a very chequered past from Ansbacher accounts /Dcc share scandal through Anglo and up the yesterdays bombshell.If you don't agree that does not negate the fact that we have an ineffectual Central Bank and any amount of examples of sharp practise by all that come under their wing.Now if you want to argue that the pension industry is the one area where everything is whiter then white thats your preogative.

AndrewJRenko

dublin49 wrote: »

I was making the point that the Banking / investment industry in this country has a very chequered past from Ansbacher accounts /Dcc share scandal through Anglo and up the yesterdays bombshell.If you don't agree that does not negate the fact that we have an ineffectual Central Bank and any amount of examples of sharp practise by all that come under their wing.Now if you want to argue that the pension industry is the one area where everything is whiter then white thats your preogative.

Interestingly though, none of those scandals that you mention had anything to do with pensions. Have there been any scandals in the pension industry in Ireland?

Jim2007

dublin49 wrote: »

I was making the point that the Banking / investment industry in this country has a very chequered past from Ansbacher accounts /Dcc share scandal through Anglo and up the yesterdays bombshell.If you don't agree that does not negate the fact that we have an ineffectual Central Bank and any amount of examples of sharp practise by all that come under their wing.Now if you want to argue that the pension industry is the one area where everything is whiter then white thats your preogative.

Like I said I really could not give a toss what you say. But when you try to doge the issue I will call you out for the sake of others reading this thread and bring the discussion by to the topic at hand.


We have heard all kinds of nonsense allegations and we are still waiting for you to bring a single valid allegation against a pension fund.

I see sheep

Jim2007 wrote: »

Like I said I really could not give a toss what you say. But when you try to doge the issue I will call you out for the sake of others reading this thread and bring the discussion by to the topic at hand.


We have heard all kinds of nonsense allegations and we are still waiting for you to bring a single valid allegation against a pension fund.

Chill out man.