NOTE: By submitting this form and registering with us, you are providing us with permission to store your personal data and the record of your registration. In addition, registration with the Medical Independent includes granting consent for the delivery of that additional professional content and targeted ads, and the cookies required to deliver same. View our Privacy Policy and Cookie Notice for further details.

You can opt out at anytime by visiting our cookie policy page. In line with the provisions of the GDPR, the provision of your personal data is a requirement necessary to enter into a contract. We must advise you at the point of collecting your personal data that it is a required field, and the consequences of not providing the personal data is that we cannot provide this service to you.

[profilepress-login id="1"]

Don't have an account? Subscribe

The ticking pensions time bomb

By Dermot - 06th Dec 2016


Like the Shakespearean fool, it is the comics who make the most sense. Kilkenomics is a four-day weekend in the great old city of Kilkenny. For seven years it has been a successful attempt by economist David McWilliams to mix humour with economics. Occurring every November, it is well worth a visit and a laugh. 

Sixty different economists and comedians from this country, and many more, were all there this year: Irish participants included Colm McCarthy, Ronan Lyons, Sarah Carey, Dara O’Briain, Colm O’Regan, Karl Spain, Gerry Stembridge, and Des Bishop. Economists from Israel, the US, the UK, Russia, Germany, and Canada all sparred with the comedians, us, and each other.

Sessions included ‘Why Play Fair When You Can Cheat? The Tarnished Economics of Sport’ and ‘Cheque-Book Diplomacy: How China Bought The World. What’s Next?’ These sessions were already sold-out so I went upstairs to an intimate talk in a cosy Kilkenny bar behind the Main Street and hidden like Kilkenny marble.

Which session attracted my attention, you ask? ‘The Consequence of Destroying Pensions’. I was not surprised to hear from Colm McCarthy that we have a pensions time bomb ticking, not only in Ireland but all over the world.

The problem comes from people starting to contribute to a pension at a later age due to longer and later education, as well as insecure contracts of employment.

We have less defined benefits schemes. People used to live for five-to-10 years on their pension but now live 10-to-20 years into retirement. Less and less people are available to fund these pensions as the baby boomers all retire at the same time. In Japan geriatric nappies are now outselling babies’ nappies! Add to this the delightful news that defined benefits pension schemes are not able to make money and grow like they promised in the past. Banks, stocks, and bonds are not doing well over the last few years. Many pension schemes have collapsed.

Cormac Lucey made us all burst into laughter and mirth by telling us the good news that the Irish national debt has reduced to €198 billion (that is €198,000,000,000). But the bad news that no one is talking about is that the real debt is actually €324 billion. This includes the defined pensions’ liability. The Government has not invested its funds into these defined pensions funds. These pensions are taken out of current taxes as they are needed.


In Japan geriatric napies are now outselling babies’ nappies


Now I did some research myself. Search ‘US debt clock’. Very interesting, as Trump would say. The total US debt is $66 trillion. That is $66,000,000,000,000. Population: 324 million. That is $203,000 of debt per man, woman, and child.In Ireland, we only have a total debt of €100,000 per man, woman and child. So you can see where we are going here. Two thirds of our debt is related to defined benefits pensions. We don’t even make weapons of mass destruction here! We have politicians. So the bottom line is that you might get your defined benefits pension when your turn comes around or you may not. More likely you will get it at a later age and less of it. The old age pension is already being delayed by Government. There is nothing to fill the gap between the usual statutory retirement age of 65 and the new retirement ages for the State pension. The dole might be an option.

In any case, this points to the inevitable future. The traditional model of one day retiring and next year playing golf, or dying suddenly due to boredom, is on the way out. We will work longer. But that is okay, because we are living longer and we are healthier than ever before. The cost of healthcare in old age is quite another matter.

The plan should be to create security when you are younger, like, pay off your mortgage and maybe have a rental property or two. Then you can wind down slowly over time as you age and do less work, rather than suddenly do no work at all. In fact, you might do more and more stuff you love and get paid for it. You might do less and less stuff you felt you had to in the past (to pay the mortgage, don’t you know, whether you liked it or not).

Maybe we should think of retiring earlier, in this model, because we know that working full time after 40 years is bad for our health but that working less for longer is good. Charles Handy always predicted a future world of having not one job but a portfolio of abilities, talents, skills and wisdoms that we sell to an evolving market. This is flexibility.

I hope that this positive and hopeful financial future will be reflected in talks between Government and GPs. Doctors work long and hard, and they deserve to know that their retirement is as secure as any TD’s. The future is not a joke but present arrangements are. We need to be allowed work if we can, and if we choose, after 65, but also feel secure if we can’t or chose not to.

Leave a Reply

Latest Issue
The Medical Independent – 24 June 2021

You need to be logged in to access this content. Please login or sign up using the links below.

Most Read