Irish heavily reliant on State pension, says new report

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Irish workers need to put more money into private pension schemes, rather than relying on the State pension for their retirement, a new study has found.

Pension management firm Mercer has released a report which says Irish people are heavily reliant on public pensions on a 'pay-as-you-go' basis, meaning funding is not set aside and instead drawn from PRSI takings from the current workforce.

The strength of our pensions system ranks only 20th out of 25 countries against more than 40 indicators - including adequacy, sustainability and integrity - in the 2015 Melbourne Mercer Global Pension Index (MMGPI), with Denmark ranking 1st.

Mercer highlights the need for less reliance on the State pension due to increased life expectancy and our current economic position.  

"The introduction of an auto-enrol system would serve to increase participation in private pension saving and would be a strong step in the right direction," said Mercer's Mairead O'Mahony.

"However, we need to ensure that this is matched by a commitment to improve plan engagement to ensure that members have a clear understanding of the savings they will need for their retirement."

The MMGPI is the world's most comprehensive comparison of pension systems, covering close to 60% f the world's population.

 

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