By Cate McCurry, PA
Forcing people to work longer to get their pension will impact their living standards, particularly those with physically demanding jobs, a committee has been told.
Economist Michael Taft said there are other ways the Government can make savings without increasing the pension age.
Last month the Government published a report which proposes raising the state pension age to 68 by 2039.
The Report of the Commission on Pensions put forward proposals in order to address the sustainability of the state pension system and the Social Insurance Fund (SIF).
However, the union Siptu claimed that data from the Department of Finance and the Fiscal Advisory Council shows that increasing the pension age would “only save” between 10-15 per cent of the overall increase in pension expenditure.
Mr Taft, a researcher for Siptu, said the debate has focused “almost solely” on the pension age.
“You would think that in the public debate that the pension age is the key to pension sustainability. It isn’t,” Mr Taft told the Joint Committee on Social Protection.
“Are there other ways that can be done, which would be more economically efficient and socially equitable? We believe that is so but, ultimately, every legislator and government and minister have to make this calculation.”
The union claimed that increasing the pension age will “save little money” and will be an “ineffective tool” in ensuring pension sustainability.
“Is the benefit arising from the increase foregone, does that outweigh the actual deficit that would be created if you increase the pension age? That is a judgment call,” Mr Taft added.
“We believe that you can actually achieve the same things without forcing people to work longer to get their pension.
“In many cases, those will be people who may not even be in the most severest, arduous or hazardous occupations, but they will be in physically demanding occupations and the actual toll on their living standards that would take place because of that.
“There is a better way of achieving the fiscal end while retaining that social good.”
He urged the committee to consider “more flexible options” such as accessing pension entitlements at an earlier age, particularly for those in arduous jobs.
The commission report recommended increasing the state pension age from 2028 by three months every year until reaching 67 in 2031.
It would increase again by three months every two years from 2033 onwards.
This would see the pension age set at 68 years from 2039.
Mr Taft said by postponing the increase in the pension age to 2028, the commission has “parachuted” the issue into the next general election.
Meanwhile, Liam Berney, industrial relations officer at the Irish Congress of Trade Unions, said there is a social aspect to consider within the pension debate.
“It’s about those people who literally can’t work beyond 65 because of the nature of their occupation, and in fact might have to retire before 65,” Mr Berney told the committee.
“People who work in construction from very early ages, from 16 and 17, up to the ages of 61 and 62 and because of the arduous nature of their employment, they just simply can’t be at work beyond those ages.
“It’s not only in construction, there are occupations within the health services, too.
“Asking a bricklayer or a nurse, or somebody who works in a very arduous occupation, to have to work beyond 65 years of age, the committee needs to consider the impact on those people.”