Ireland finalising proposals for new pension reserve fund

"I intend to seek government approval in the coming weeks for a longer-term fund which could be drawn down over time as age-related and other structural expenditure pressures arise in the future," he said. The Irish Fiscal Advisory Council, the country's independent fiscal watchdog, called on Thursday for such a body to be set up, warning that the funding of the state pension would come under increasing pressure in the coming decade as Ireland's relatively young population ages.

Ireland's finance minister is finalising proposals to establish a new fund to put surplus tax receipts aside to meet the costs of longer term pension and structural expenditure pressures, Michael McGrath said on Thursday. McGrath said he has was particularly conscious of the need to put windfall corporate tax receipts to good use. Those funds - mostly paid by Ireland's large hub of foreign multinationals - have more than doubled since 2020 to record levels and pushed the public finances into a healthy surplus.

"In my view this requires new structures to be put in place," McGrath said in a statement, saying the new fund would be separate to the existing 6 billion euro national reserve fund which "serves a useful purpose in the short-term". "I intend to seek government approval in the coming weeks for a longer-term fund which could be drawn down over time as age-related and other structural expenditure pressures arise in the future," he said.

The Irish Fiscal Advisory Council, the country's independent fiscal watchdog, called on Thursday for such a body to be set up, warning that the funding of the state pension would come under increasing pressure in the coming decade as Ireland's relatively young population ages. The proportion of those aged 65 and over as a share of the working age population is set to rise to 46% in 2050 from 25% in 2020.

Ireland's central bank forecast this month that Ireland's budget surplus would rise a touch to 2.7% of gross national income this year, before jumping to 4.8% or 15.8 billion euros in each of the following two years. Ministers, the central bank and fiscal watchdog have all warned that the soaring corporate tax take represents a major vulnerability for the public finances and cannot be relied upon to continue.