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Ireland’s pension system will change next January

Dublin: There are indications that the pension system in the country is on the path of policy change. It is expected that new pension changes will be implemented by next January. The pension system will be dismantled in accordance with the Fiscal Advisory Group’s recommendations and other studies. The financial challenges posed by the current pension system in the country have already been brought to the attention of the government.

Almond Financial, a financial adviser, conducted a study of pension systems in 30 European countries earlier this year and discovered that pensions are paid at rates that are higher than the breakeven point between the cost of living and income. The study offered some innovative suggestions to make the system more sustainable.

It has put forward an option to change pension payments to retirees at a higher weekly payment rate for the rest of their lives. It is believed that the government may consider this.

The revised pension reforms are expected to go into effect in January of next year. Allow employees to increase their current pension age from 66 to 70 years. Those who do so will be entitled to a €315 weekly payment. This option is for those who do not want to retire at 65 or 66.

However, pensions expert and financial adviser Frank Conway believes that €315 is not a good option. He proposes that the pension amount be increased to 400 euros.

The government currently spends approximately €14,000 per year (€265.30 per week) on pensions. He claims that if the period is extended for four years, people will lose €56,000 in pension income.

The Pensions Commission proposed gradually raising the pension age to 67 in 2031 and 68 in 2039. The commission suggested that a pension fund be set up using corporation tax and the income topped up by windfall corporation tax receipts, then invested in a ring-fenced fund.

The advisory council has long warned the government about the rising cost of pension funding as the proportion of retirees doubles over the next few decades. Figures show that for every retired person, four people are employed.

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