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Accrued-to-date liabilities of pension schemes reached €767.3bn at the end of 2021, representing 177% of GDP or 329% of GNI*.
Compared with the last estimate for the end of 2018, this is a rise of €159.5bn (a 26% increase).
Private pension schemes constitute €120.9bn (16% of total). Such funded schemes are part of the core national accounts.
Government managed schemes, which are unfunded (i.e. on a pay-as-you-go basis) have estimated liabilities of €646.4bn. These schemes are not part of core national accounts.
Pension entitlements under the Social Insurance Fund, totalling €470.7bn, represent the largest component of the total.
The total accrued-to-date pension liability for Ireland stood at €767.3bn or 177% of GDP (329% of GNI*) by the end of 2021. This represents an increase of €159.5bn since the end of 2018. The rise in accrued pension entitlements under the Social Insurance Fund significantly contributed to this increase. Legislative changes increasing the retirement age for the State Pension (Contributory) to 68 have been repealed. The retirement age thus remains at 66 increasing the liability which contributes to the €111.5bn increase since 2018.
In line with many countries, a significant portion of the liability relates to government managed schemes which totalled €646.4bn or 149% of GDP by the end of 2021.
Approximately three-quarters (€470.7bn) of the liabilities associated with government managed pension schemes pertains to State pensions. This includes the State Pension (Contributory), the Widow's, Widower's or Surviving Civil Partner's (Contributory) Pension, and the Invalidity Pension. This represents a notable increase of €111.5bn (31%) since 2018, primarily influenced by the repeal of legislation to increase the retirement age for the State Pension (Contributory) to 68 and keeping it at 66.
Liabilities stemming from defined benefit occupational pension schemes within the public service amounted to €175.7bn by the end of 2021, marking an increase of €26.1bn (17.4%) compared to the 2018 estimate.
Private occupational pension schemes liabilities were estimated to be €120.9bn at the end of 2021, constituting 16% of the total liability. This amount is roughly evenly split between defined benefit and defined contribution schemes with €61.9bn attributable to the former and €59.0bn to the latter.
Ireland’s pension liability is comparatively low when contrasted with some European countries, reflecting its relatively young population.
For instance:
These international comparisons underscore the variations in pension liabilities across different countries, influenced by demographic factors, economic conditions, and pension system designs.
[1] Data in respect of all EU Member States for 2021 will be available on the Eurostat website from 16th February 2024.
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Statistician's Comment
The Central Statistics Office (CSO) has today (15 February 2024) published the Estimates of Irish Pension Liabilities 2021 release.
Commenting on the release, Ciara O’Shea, Statistician in the Government Accounts Compilation and Outputs Division, highlighted the importance of this publication: “This publication brings together data on private and public occupational pension schemes and pensions under the Social Insurance Fund. It measures the cumulated pension benefits owing to households by employers and government at the end of 2021 based on the pension benefits they had accumulated by that point in time. The estimates published today show pension liabilities of €767.3bn at the end of 2021.
This publication marks the third iteration of the dataset. It is based on EU statistical reporting of pensions’ data that has been adopted by all EU Member States. It aims to enhance the comparability of pension schemes across the EU while also supplementing the National Accounts.
The consistent use of the discount rate between 2018 and 2021 facilitates meaningful comparisons between the two periods."