BUDGET PERSPECTIVES 2008. PENSION PRIORITIES: GETTING THE BALANCE RIGHT?

Callan, Tim and Nolan, Brian and Walsh, John R. (2008) BUDGET PERSPECTIVES 2008. PENSION PRIORITIES: GETTING THE BALANCE RIGHT? [Policy Paper]

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Abstract

The National Pensions Policy Initiative (NPPI) recommended a target replacement income of 50 per cent of pre-retirement income before tax, and an overriding minimum income of 34 per cent of gross average industrial earnings (GAIE). The Pensions Board (2005), in its National Pensions Review, confirmed these targets.1 However, a number of Board members …believe that a higher minimum pension target is needed to ensure that pensioners without supplementary pensions have an adequate income by reference to household incomes generally. Other board members also support an increase in the basic pension target for reasons of greater social equity. Here we revisit these issues, and are able to analyse the trade-off between the costs of State pensions, the cost of State support for private pensions and the overall impact on poverty and the distribution of income.

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