With the 65 years of age cut-off point long associated with retirement now being called more into question as people continue to live and work longer, a new definition is now being sought for retirement. According to research presented this week at the Retirement Planning Council of Ireland Conference at the Aviva Stadium in Dublin, four out of 10 people coming up to retirement have now expressed a desire to continue working after they leave their current job, whether for money or as volunteers. RPCI CEO John Higgins has now called for a new way to define the concept of retirement in terms, not just of economic gain, but also for social gain.
“People approaching retirement are the first generation of the Knowledge Economy. They are computer literate. They understand and use the internet and, above all, they have the flexibility of mind and attitude sorely needed in our economy. The issue for Ireland now is to recognise this cohort as an enormous potential asset,” said Mr Higgins.
Figures released at the conference indicate that 38 per cent of respondents nearing retirement plan to continue working. A massive 79 per cent of people nearing retirement are willing and able to play a role as volunteers, with the majority still unsure about which type of voluntary activity they will choose to participate in.
“The challenge – and it is arguably the single biggest social challenge of our time – is to channel the energies of that cohort into activities which have a significant social benefit,” added Mr Higgins.
The research also found that, despite the current economic turmoil, over two thirds of those approaching retirement consider themselves financially secure. Half of these people would like to invest their lump sum when they retire. However 86 per cent expressed a total lack of trust in those charged with safeguarding investment.
Alan Broxson, chairman of the Irish Pensions Trust, warned that pension provision is at a watershed.
“We are witnessing the rapid decline of defined benefit schemes,” he told the conference. “People currently approaching retirement are still reaping the benefits of this model but huge asset shortfalls are already apparent because of increased longevity, low interest rates and stock market volatility”.
He added that the current rules give those already retired priority rights which are unfairly detrimental to the rights of those still working. The latter are already shouldering the burden of reduced benefits as employers are unable to meet the cost of the shortfalls.
Mr Broxson warned that the problems in the private sector similarly apply to the public service but the huge costs are masked because the State is not obliged to publish the current value of pension liabilities.
“ The National Pension Reserve Fund was created to help pay for huge public service pension obligations which will be even more apparent in coming years. If the fund is now used to solve other national problems the tax-payer will be faced with even more pension obligations in the future,” he said.