Brian O'Shea (Waterford, Labour)
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Question 95: To ask the Minister for Social and Family Affairs the number of persons currently in receipt of a State pension; the implications for pension policy of the changing age structure of the Irish population; his Department's assessment of the number of persons likely to be in receipt of State pensions in ten years' time and 20 years' time; and the provisions which are now being made in that regard; and if he will make a statement on the matter. [11846/05]

Séamus Brennan (Dublin South, Fianna Fail)
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At the end of March 2005, there were 208,050 people receiving an old age contributory or retirement pension and 84,878 receiving an old age non-contributory pension. An actuarial review of the social insurance fund, undertaken on behalf of my Department in 2002, projected that the number of recipients of old age contributory and retirement pensions will increase to 255,000 by 2011 and 321,000 by 2016. The increase will, to some extent, be balanced by a reduction in the number of people receiving an old age non-contributory pension. The numbers receiving this pension have declined by over 20% in the last ten years which reflects improved social insurance coverage and increased labour force participation, particularly among women.

In common with other European countries, the population of Ireland is ageing as a result of a combination of increasing life expectancy and a declining birth rate. The decline in the birth rate is relatively recent and this, coupled with the effects of high emigration for much of the period up to the 1990s, has resulted in Ireland having the lowest proportion of older people in the EU with 11.2% aged 65 and over, compared to the current EU average of 16.1%.

The proportion of older people in Ireland will remain at broadly the same level for the next ten years after which it is projected to increase rapidly to 15% in 2021, 19% in 2031 and 28% in 2056. A similar situation exists in respect of the number of pensioners relative to the number at work.

Ageing, therefore, presents the same challenge to Ireland in meeting growing pension costs as to other countries except that we have a longer period to prepare for its full impact. The population projections suggest that no special measures are required in the timescale envisaged by the Deputy. However, the Government is making preparations, through the national pensions reserve fund, to part-fund state pensions costs from 2025 onwards.

Pensions have been an important issue at EU level in recent years. This is not surprising given that the challenges facing pensions systems are more immediate for other member states. The EU has assessed national pensions systems under the agreed objectives of adequacy, financial sustainability and modernisation. In this regard, a joint EU Commission and Council report, published in 2003, considered that Ireland has made good progress in ensuring both the financial sustainability and adequacy of our pensions system.

The report concluded that our system appears to be, in broad terms, financially sustainable despite projected major increases in future pensions expenditure. The situation will be kept under review.