(October 4, 2013) — The current rising birth rate in economically-challenged Ireland may help the nation’s burgeoning pension problem, a minister has said.
A report by the country’s Comptroller and Auditor General last year estimated that state employees’ pensions would cost €116 billion over the next 60 years. The country’s debt to GDP ratio currently sits around 117%.
Robert Watt, secretary general at the Department of Public Expenditure and Reform, described the figure as “frightening”, the Irish Independent reported.
“The good news on that is that babies are remarkably popular,” he told the Irish Parliament’s Public Accounts Committee yesterday. “If people go on producing babies that will help.”
Ireland has a relatively young population amongst European countries. A quarter of its population is under 18, compared to the continent-wide average of 19%. This large group of youngsters coming into the tax system should help boost government coffers, which are hit for €3 billion a year to fund state employees’ pensions.
Corporate defined benefit pension funds are also troubled. The Irish Association of Pension Funds has estimated that 10% have already closed entirely, with a further 14% planning to shut in the next 12 months.
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