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.


1 2 3 142
March 24th, 2018

Capital inflows, crisis and recovery in small open economies

Our latest paper, and my first with my Melbourne School of Government affiliation (plus my UL one, of course) is […]

March 7th, 2018

Southern Charm

What's it like working at Australia's number one university, ranked 23rd in the world for social sciences? It's pretty cool, […]

February 7th, 2018

Freedom interview

I did an interview for an app I love using called Freedom. Basically I pay them to block off the […]

December 10th, 2017

Marian Finucane Interview

I did a fairly long interview about the experience of moving to Australia with my family. You can listen here.

November 17th, 2017

Increasing wages for macroeconomic stability

My first piece for the conversation is here. I'm arguing the economy would benefit from wage increases, paid for from […]

November 14th, 2017

Health Workforce Planning Models, Tools and Processes: An Evidence Review

Below is my recorded talk, here are my slides, and the handout for the 4th Global Forum on Human Resources for […]

October 5th, 2017

Aalborg Keynote

My talk from the fourth Nordic Post Keynesian conference is up. The full list of keynotes is here.

October 1st, 2017

AIST Debt and Demography talk

(Apparently Limerick is in the UK now!)

September 7th, 2017

My AIST Keynote: Europe Exposed

In which a camera man faints halfway through--he's OK though, I checked afterwards!

July 22nd, 2017

MacGill Summer School Speech

My speech at the MacGill Summer School is here. Thanks to Joe Muholland for inviting me to speak.

May 25th, 2017

Business Post Articles

All my Sunday Business Post articles (back to 2014/5, when I joined the paper) are available here, behind a paywall, and […]

January 15th, 2017

A month with the MacBook Pro

This is a quick update to the the previous post about getting a new MacBook Pro. So far three things […]

December 23rd, 2016

Some Thoughts on the New MacBook Pro

I’ve been working on Mac laptops since the early 2000s. I typically get a new one every 2-3 years. My […]

December 13th, 2016

Strange days indeed

We’re living through very strange times. Times when it’s a good thing that only 46 per cent of the Austrian […]

November 22nd, 2016

Will robots eat your job? @ryanavent's snapshot of a global economy in flux

Review of 'The Wealth of Humans', By Ryan Avent, Penguin, €19 Will robots eat your job? Will your kids have […]