Sunday, 16 September 2012

Social Protection €324bn shortfall?

THE DEPARTMENT OF Social Protection has played down a report which claims that the State’s future pension and social welfare liabilities could amount to some €324 billion.
The Irish Times reported this morning that a review of the Social Insurance Fund that was carried out by the accountants KPMG indicated that a growing shortfall in the fund would see accumulated deficits of up to €324 billion by 2066.
The paper’s economics editor Dan O’Brien wrote that rapidly rising pension liabilities are the cause of the fund’s “exploding deficit in the future”.
But in a statement the Department of Social Protection said that the €324 billion referred to was the sum of all projected annual deficits up to 2066 “expressed in current terms, assuming no action is taken”.
The statement said: “As stated by KPMG, “the long-term projections, by their very nature, are unlikely to be borne out in practise”, the report emphasises “the trends which emerge over the period”.
The report was the result of a third actuarial review of the Social Insurance Fund up to the end of 2010.
According to the Department, “the review projects the financial sustainability of the Fund based on a set of agreed assumptions and a series of projections of the Fund’s income and expenditure for the period in question, taking account of policy, economic and demographic changes.”
The report, which was completed in June of this year, has not been made public but the government has indicated that it will be shortly.

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