Pensions in the Republic of Ireland

Compared to other liberal democracies, Ireland's pension policies have average coverage, which includes 78 percent of the workforce,^[1] and it offers different types of pensions for employees to choose from.  The Irish pension system is designed as a pay-as-you-go program and is based off of both public and private pension programs.  The OECD's Reviews of Pension Systems: Ireland,^[2] explains the structures of both the public and private pension systems. "The public pension system has two sets of flat-rate benefits: 1) a basic flat-rate benefit to all retirees that meet the contribution conditions, the State pension (contributory) or SPC and the State pension (transition) or SPT; and 2) a means-tested benefit tot those that have not contributed or have not contributed enough, the State pension (non-contributory) or SPNC.  The SPC is payable from age 66, with the maximum personal rate of EUR 230.30 a week for a single person (paid for 52 weeks per year), corresponding to 33.1 percent of average earnings.  The SPNC is currently payable from age 66, with a maximum rate of EUR 219 per week for a single person, i.e. 31.5 percent of average earnings.  All recipients of pension benefits are entitled to the Household Benefits Package comprising an electricity/gas and telephone allowance as well as a free television license, if they are over the age of 70, while those between the age of 65–69 are means-tested.  The contribution conditions for the SPC are that recipients have started paying social insurance before reaching age 56 and they also have paid at least 520 full-rate insurance contributions if reaching 66 after April 6 2012.  The contribution base rate is currently 14.75 percent, with 10.75 percent paid by employers and 4 percent by employees (except for employees who earn less than EUR 352 per week for whom only employer contributions are payable).  The SPNC is financed through general taxation and is paid according to need.  As for private pension programs, there three main types; 1) occupational pension schemes that are set up by employers; 2) Personal Retirement Savings Account (PRSAs) that are personal pension saving plans and contributions are made by individuals; and 3) Retirement Annuity Contracts (RACs) that are also a personal pension saving plan but are excluded from those who are already enrolled in a company pension plan".^[2]  When looking at the coverage of public and private pension programs, SPC and SPNC cover 46 percent of the workforce, and SPT and occupational or private pension covers 37 percent of the workforce, which is a result from striking differences in industries and occupations.^[3] Raab and Gannon point out how "occupational pensions are generally not mandatory, except in the public sector, and that 55 percent of professionals are able to expect a firm's pension but the corresponding share for sales people is 23 percent".^[3]  The Irish pension policies are designed to offer incentives for labor participation but are still reforming to the changes in the economy.

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