Winter 2013 Issue of ESR

A few Comments on the pension paper:

Table 1: Some figures seem a bit off to me.

1. 59.6% of people 50-64 economically inactive seems very high.
2. 43% of 50-64 years in the sample are PS workers. Is this correct, or am I misreading the table.
3. ~46% have an occupational pension of some kind. This seems high.

Section 2 comments that (Nivakoski and Barret (2012)) the State pension accounts for 50% of all income, and 62% for women, with average non-State pensions of €194 euro. Although qualified by commentary, this is a deceptive figure in terms of actual people. This is one case where a evaluation based on the median would give a clearer picture of the human effect of pension distribution.

The papers primary question is whether people have ‘adjusted their expected age of retirement’. The reality for a lot of people is that they have little control over an often involuntary age, when it becomes clear that they are no longer required by either employer or economic society.

One final point, and not to be facetious, but I had not heard of Black Thursday, until I read the article. However the picking of different dates would not probably change any conclusions. From my own perspective, the critical time frames were:

A. Sept 2008, the bank heist.
B. Feb / Mar 2009, when jobs were being lost by the thousands each week.
C. Our EZ / IMF ‘Partners’ arriving in town. (Nov? 2010)

[Black Thursday may have been the day that all the bad news was carried, but most people suspected that bad news long before it was admitted.]

The point in the conclusion that most people may not be aware of the changes or do not believe they will happen is probably relevant. [I already know of two cases (5% of workforce) in a small company where employees were ‘kept’ on until 66 rather than forced to retire at 65 last year and live on fresh air and spring water for a year.]

Is section 5.2 entirely correct in saying, if it say, that only private sector workers born after Jan 1st 1949 are affected?
My understanding is that PS workers, recruited after 1994, would also be affected, if they are required to retire at 65.
Here we get into the area of what people believe will actually happen.
Do PS workers really believe that they will be forced to retire at 65 and not receive the ‘State pension’ piece of the total pension until they are 66 in 2014 and until 67 in 2021?

One final comment:
Reform is the rather neutral word used to describe the changes to pension legislation.
As one of the people who will, hopefully, reach 67 in 2021, the reform consists of two full years of lost pension, when compared to somebody who retired in 2012. Reform?
What is the new pension age for TDs, senators etc in 2021. Will they also have to be 67 before they get a pension? Just asking!

[PS I should say I am not qualified to make sense of the Logit models used, so that some of the significance of the data may have been lost on me]