Joan Burton (Dublin West, Labour)
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Question 245: To ask the Minister for Social and Family Affairs when he intends to carry out an actuarial review of the social insurance fund; if he will carry out and publicise a review of the fund at 31 December 2004. [17021/05]

Séamus Brennan (Dublin South, Fianna Fail)
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Section 17 of the Social Welfare Act 1998 provided that an actuarial review into the condition of the social insurance fund be undertaken and published by the end of 2002 and repeated every five years thereafter.

The first actuarial review of the social insurance fund was completed and published in 2002. It covered the period from 2001 to 2056. The purpose of the review is to allow an assessment of the extent to which the fund may be expected, in the longer term, to meet the demands in respect of payment of benefits and other payments, while also having regard to the adequacy or otherwise of the contributions to support social welfare benefits. This analysis serves to inform short, medium and long-term policy development in relation to the social insurance system generally, as well as the emerging surpluses of recent years.

In the first report, using a number of varying assumptions in relation to demographics, inflation and economic growth and considering the impact of increasing benefit rates and earnings contribution limits on the financial position of the social insurance fund, the review presented a number of different scenarios with the conclusions ranging from the social insurance fund being exhausted in 2005 to 2056.

Ireland, in common with other European countries, has a population which is ageing. A combination of increasing life expectancy and a declining birth rate will result in a projected increase in the number of older people in society. The ageing population 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. While the social insurance fund is currently in a healthy financial situation, this surplus may not continue indefinitely. Accordingly, the Government is making preparations, through the national pensions reserve fund, to part-fund state pensions costs from 2025 onwards.

The actuarial review of the social insurance fund is required to be repeated every five years and preparatory work for the next review will begin later this year. As required under statute, the report will be laid before each House of the Oireachtas within six months of the completion of the review.