As our personal debt burden worsens – and it will as interest rates rise – the new government will have to finally have to acknowledge this growing burden on individuals, their families and the state.
Our three pillar pension system is complex, expensive and increasingly, unsustainable.
Civil and public sector pensions are paid mainly general taxation (especially now that the National Pension Reserve Fund is effectively gone) and from maximum net (after tax relief) worker contributions of about circa seven per annum.
The cost of benefits is closer to a 20 per cent plus annual contribution. The total public service pay bill will cost €2.23 billion in 2011, compared to €1.35 billion in 2005.