In the final analysis, our government should be judged by the way it treats children and the elderly. Long hospital waiting lists, schools in substandard buildings, high rates of child poverty, cuts to children’s allowance, social welfare and pensions, abolishing the bin charges waivers…. The list goes on.
Mary Hanafin’s latest plan to punish pensioners is indeed part of a pattern.
Hanafin’s scheme will:
* Force everyone who is currently under the age of 49 to work until they are 68. No state pension will be provided until this date – so we can starve, beg or work despite tiredness and ill health.
* Reduced state pension for anyone who do not have 30 years of PRSI payments. If you have lived abroad or have been out of work for long periods, you will face difficulties.
* Reduced occupational pension for anyone entering the public sector. Instead of getting a proportion of your final salary, your pension will be brought down by the number of years you spent on lower wages.
* Forced contributions by workers to the private pension industry. Workers will be ‘auto-enrolled’ into an industry that rips them off and uses their savings to speculate and gamble. Even if you withdraw from a scheme, you will be automatically enrolled every two years and if you forget to withdraw within six months you lose your contributions.
* Introduce a new round of wage cuts for private sector workers and an incentive to employers to move to cheaper pension schemes. Normally an employer contributes twice as much to a pension scheme as a worker. But under Hanafin’s scheme, they contribute only half. The employers’ organisation IBEC has already announced that they will cut wages to pay for their mandatory contributions. But they will also close down existing schemes to move to ones where they pay a lower proportion.
At the core of Hanafin’s scheme is a reliance on the private pension industry. Today these operate primarily though a defined contribution scheme. This means that a worker contributes to a pot of money that is then speculated on stock markets. The worker carries all the risk because they only get what these stocks are worth on the day they retire.
Last year, for example, the private pension funds lost nearly 40 percent of their value because they were mainly gambled on Irish bank shares – the savings of workers are now lodged in mutual funds that are moved across the world in search of quick returns.
These funds are effectively controlled by huge financial conglomerates who link up with hedge funds to speculate with the savings made by workers – and then to take their pound of flesh as ‘charges’. The riskier the enterprise, the higher the charges for these lords of finance. One survey in 1999, for example showed that just five mutual funds controlled assets that were the equivalent of the combined GDP of Britain and France.
In most previous societies, age was honoured and treated with respect. In tribal societies, there were even ‘councils of the elders’ who had a significant input into decision making. But to our government, the aged are a burden. There are supposed to be too many grannies and granddads still alive and they need to be discouraged. This is why we hear so much talk of a ‘pension time bomb’.
Demography is hardly an exact science as birth and death rates often fluctuate in surprising ways. More importantly, the productivity of workers has increased dramatically in past decades so that fewer workers should be able to support those who are too old to work.
If there were less immigration controls, many more younger workers would also be able to enter the ‘greying’ societies of Western Europe and so support the elderly.
So no one should be taken in by statistics which claim to show an issue with age dependency. The problem is not that people are living longer – it is that there is not the political will to support people who are considered to be ‘unproductive’.
This government has attacked the youth with the cuts in social welfare, the public sector workers with pay cuts and now the elderly over their pensions.
What next?
We need a real and practical alternative way of dealing with pensions:
* Workers should contribute only to a public scheme which does not use their savings for speculation.
* These funds should be used to promote long term and sustainable investments which bring a return to future generations e.g. electricity generation or investment in the development of natural resources.
* The state should provide a guaranteed income of at least 70 percent of the average industrial wage through the returns on these long term investments.
For more information on People Before Profit in the South West Inner City or to get involved either call or text JOIN to 086 871 5293
