Are public sector pensions sustainable?

Charlie Larkin says no.

Charlie wants to reform the pensions public sector workers get by eliminating the cost of living parity they currently enjoy, moving the pensions into a sovereign wealth fund rather than paying for them on a current expenditure basis, and allow these pensions to be trade able, as they have an obvious value.

I've got to say I disagree with Charlie about this (yes, readers, I know you're thinking 'he would', but hear me out). Retired People

First, as Charlie's opponent writes, pensions reform should not be a race to the bottom: only 51% of people in Ireland have pensions at all. This number needs to go up, not down, and Irish people need to save more if we are to enjoy our old ages. Simply because one sector of society gets a pension automatically, and others don't, is not a reason for changing the terms and conditions of the pension.

Second, placing huge reserves of liquid assets in the hands of a few investment professionals is not the way to go when it comes to pensions---just look at the national reserve fund, which would have made more money since 2001 if we'd stuck it 1% of GDP in a current account. Over the medium term yes, the markets will recover, but fully indexed pensions aren't the way to go, because if you get it wrong, people's retirements are at stake.

Third, allowing individuals to trade using their pensions is theoretically sound, and may even realise value, but this opening up of another credit channel is not without risks. What kind of situation would force me to borrow on the strength of a pension? Surely not a holiday or a small car. Most likely the person would be trading away their retirement years to help themselves out of a jam in the here and now. Pensions should not be used for those purposes, because when they are, and something goes wrong, the downside risk is too great. The nightmare scenario is someone who pays their pension in, loses it, and ends up on a---you guessed it---state pension. So the state pays twice, in this scenario.

Yes, public sector pensions are good, and should be included in pay deals and reforms to the system should be considered, but let's not lose sight of what's important---everyone should automatically save for their retirements.