Kakoulidou, Theano; Keane, Clai e; Sándo o á, Simona
Resea ch Repo
S a e Con ibu o y Pension e o m: Winne s and lose s.
E idence om he I ish Longi udinal S udy o Ageing
Budge Pe spec i es, No. 2025/2
P o ided in Coope a ion wi h:
The Economic and Social Resea ch Ins i u e (ESRI), Dublin
Sugges ed Ci a ion: Kakoulidou, Theano; Keane, Clai e; Sándo o á, Simona (2024) : S a e
Con ibu o y Pension e o m: Winne s and lose s. E idence om he I ish Longi udinal S udy o
Ageing, Budge Pe spec i es, No. 2025/2, The Economic and Social Resea ch Ins i u e (ESRI), Dublin,
h ps://doi.o g/10.26504/BP202502
This Ve sion is a ailable a :
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STATE CONTRIBUTORY PENSION REFORM:
WINNERS AND LOSERS: EVIDENCE FROM
THEIRISH LONGITUDINAL STUDY OF AGEING
THEANO KAKOULIDOU, CLAIRE KEANE AND SIMONA SÁNDOROVÁ
AUTHOR1 AND AUTHOR2
BUDGET
PERSPECTIVES
2025
PAPER 2
June 2024
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STATE CONTRIBUTORY PENSION REFORM:
WINNERS AND LOSERS: EVIDENCE FROM THE
IRISH LONGITUDINAL STUDY OF AGEING
Theano Kakoulidou
Clai e Keane
Simona Sándo o á
June 2024
BUDGET PERSPECTIVES 2025
PAPER 2
A ailable o download om www.es i.ie
2024 The Economic and Social Resea ch Ins i u e
Whi ake Squa e, Si John Roge son’s Quay, Dublin 2
h ps://doi.o g/10.26504/BP202502
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(h ps://c ea i ecommons.o g/licenses/by/4.0/), which pe mi s un es ic ed use, dis ibu ion, and
ep oduc ion in any medium, p o ided he o iginal wo k is p ope ly c edi ed.
ABOUT THE ESRI
The Economic and Social Resea ch Ins i u e (ESRI) ad ances e idence-based
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ESRI esea che s apply he highes s anda ds o academic excellence o challenges
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The Ins i u e was ounded in 1960 by a g oup o senio ci il se an s led by D T.K.
Whi ake , who iden i ied he need o independen and in-dep h esea ch analysis.
Since hen, he Ins i u e has emained commi ed o independen esea ch and i s
wo k is ee o any exp essed ideology o poli ical posi ion. The Ins i u e publishes
all esea ch eaching he app op ia e academic s anda d, i espec i e o i s
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o Public Expendi u e NDP Deli e y and Re o m.
Fu he in o ma ion is a ailable a www.es i.ie.
THE AUTHORS
Clai e Keane is an Associa e Resea ch P o esso a he Economic and Social
Resea ch Ins i u e (ESRI) and an Adjunc P o esso a T ini y College Dublin (TCD).
Theano Kakoulidou is a Resea ch O ice a he ESRI and an Adjunc Associa e
P o esso a TCD. Simona Sándo o á is a Resea ch Assis an a he ESRI.
ACKNOWLEDGEMENTS
We a e g a e ul o he I ish Longi udinal S udy o Ageing (TILDA) o g an ing us
access o he Resea ch Mic oda a File. We hank Keelan Bei ne, Anne Nolan and
Ba a Roan ee o p o iding access o he TRIAM model as well as Michael Doolan
o esea ch assis ance. This wo k was ca ied ou wi h unding om he ESRI’s Tax,
Wel a e and Pensions Resea ch P og amme (suppo ed by he Depa men s o
Public Expendi u e, NDP Deli e y and Re o m; Social P o ec ion; Heal h; Finance;
and Child en, Equali y, Disabili y, In eg a ion and You h), which is g a e ully
acknowledged.
Resea che s in e es ed in using TILDA da a may access he da a o ee om he
ollowing si es: I ish Social Science Da a A chi e (ISSDA) a Uni e si y College
Dublin h p://www.ucd.ie/issda/da a/ ilda/; In e uni e si y Conso ium o
Poli ical and Social Resea ch (ICPSR) a he Uni e si y o Michigan
h p://www.icps .umich.edu/icps web/ICPSR/s udies/34315
This pape has been accep ed o publica ion by he Ins i u e, which does no i sel ake ins i u ional
policy posi ions. The pape has been pee e iewed p io o publica ion. The au ho s a e solely
esponsible o he con en and he iews exp essed.
Table o con en s | iii
TABLE OF CONTENTS
ABSTRACT ............................................................................................................................................. VI
SECTION 1 INTRODUCTION ................................................................................................................ 1
SECTION 2 BACKGROUND .................................................................................................................. 3
SECTION 3 DATA AND THE TRIAM MODEL ......................................................................................... 7
3.1 Gene al o e iew ............................................................................................................. 7
3.2 Modi ied TRIAM ............................................................................................................... 8
3.3 Es ima ing PRSI con ibu ions .......................................................................................... 8
3.4 P ojec ed income ........................................................................................................... 10
SECTION 4 RESULTS .......................................................................................................................... 12
SECTION 5 CONCLUSIONS ................................................................................................................ 22
REFERENCES ........................................................................................................................................ 24
APPENDIX I .......................................................................................................................................... 25
APPENDIX II ADDITIONAL GRAPHS ................................................................................................... 27
i | S a e Con ibu o y Pension e o m: winne s and lose s
LIST OF TABLES
Table 1 S a e Con ibu o y Pension a es, be o e and a e Budge 2012 ..................................... 4
Table 2 S a e Con ibu o y Pension a es 2024 (YAM) ................................................................... 5
Table 3 Desc ip i e s a is ics ......................................................................................................... 14
Table 4 A e age weekly S a e Pension a e by gende ................................................................. 14
Table 5 P opo ion en i led o he maximum SPC a e by gende ............................................... 15
Table 6 A e age weekly SPC a e, 2024 ........................................................................................ 16
Table A.1 S a us changes Wa e 1 o Wa e 5 ................................................................................... 26
LIST OF FIGURES
Figu e 1 Change in S a e Pension en i lemen as % o S a e Pension ............................................ 17
Figu e 2 Change in SPC en i lemen as % o S a e Pension, couple le el ...................................... 19
Figu e 3 Change in S a e Pension en i lemen as % o S a e Pension ............................................ 20
Figu e 4 A e age change by income quin ile ................................................................................. 21
Figu e A.1 Change in S a e Pension en i lemen as % o o al pensions ........................................... 27
Figu e A.2 Change in S a e Pension en i lemen as % o o al pensions, couple le el ..................... 27
Figu e A.3 Change in S a e Pension en i lemen as % o o al pensions, by educa ional
a ainmen ........................................................................................................................ 28
Abb e ia ions |
ABBREVIATIONS
DB De ined Bene i
DC De ined Con ibu ion
HICP Ha monised Index o Consume P ices
PRSI Pay Rela ed Social Insu ance
SPA S a e Pension Age
SPC S a e Pension, Con ibu o y
SPNC S a e Pension, Non-Con ibu o y
TCA To al Con ibu ions App oach
TILDA The I ish Longi udinal S udy on Ageing
TRIAM TILDA Re i emen Income Adequacy Model
YAM Yea ly A e age Me hod
i | S a e Con ibu o y Pension e o m: winne s and lose s
ABSTRACT
The Yea ly A e age Me hod used in calcula ing S a e Con ibu o y Pension
en i lemen s has been c i icised o c ea ing anomalies, pa icula ly o women. I
has been announced ha om 2034 onwa ds, en i lemen s will be based ully on
he new To al Con ibu ions App oach. This pape examines he impac o his
mo e, examining who will gain o lose om his change. O e all, we ind li le
change in he a e age weekly pension a e wi h a sligh all o men and no change
o women. These a e age changes mask gains and losses o some; a ound 14 pe
cen o women and 12 pe cen o men will ace a loss unde he To al Con ibu ions
App oach while 5 pe cen o men and 30 pe cen o women will see a gain. Mo e
women will quali y o he maximum pension a e unde he To al Con ibu ions
App oach due o he emo al o anomalies associa ed wi h he Yea ly A e age
Me hod. On a e age, losses a e e y small, less han 1 pe cen o pension income,
bu will be la ges a he bo om end o he income dis ibu ion.
Da a and he TRIAM Model | 7
SECTION 3
Da a and he TRIAM Model
3.1 GENERAL OVERVIEW
This analysis uses su ey da a om The I ish Longi udinal S udy on Ageing (TILDA).9
The su ey is a na ionally ep esen a i e s udy o indi iduals li ing in p i a e
households10 o I eland aged 50 and o e and hei spouses and pa ne s. The aim
o he su ey is o be able o look a he heal h, social and inancial ci cums ances
o he olde coho o he I ish popula ion. The i s wa e o in e iews was
unde aken be ween Oc obe 2009 and July 2011. A o al o 8,175 indi iduals aged
50 and o e pa icipa ed, along wi h 329 younge pa ne s o pa icipan s, lea ing
a inal sample o 8,504.11 Subsequen wa es o in e iews we e ca ied ou e e y
wo yea s, he mos ecen being Wa e 6 whe e da a collec ion is ongoing since
2020.12
The aim o his pape is o iden i y winne s and lose s using he TCA e sus he
YAM in he SPC calcula ion. We use an augmen ed e sion o he TILDA Re i emen
Income Adequacy Model (TRIAM) de eloped by Bei ne e al. (2020) o simula e
pension en i lemen s unde bo h he YAM and TCA me hods. TRIAM was o iginally
de eloped o assess income adequacy in e i emen using di e en de ini ions o
e i emen income. Fo he pu pose o his pape , we only simula e income in i s
na owes de ini ion, including only S a e, occupa ional and p i a e pensions. This
allows us o calcula e di e ences be ween pension income unde he wo
app oaches and de e mine gains and losses in S a e Pension income.
Following he o iginal model, we use da a om Wa e 1,13 ocusing on he sample
o 1,959 indi iduals who we e bo n be ween 1955 and 1960. These indi iduals
ha e a S a e Pension Age (SPA) o 66, wi h an expec ed da e o eceip anging om
2021 o 2026. Ou sample would ideally include indi iduals e i ing u he beyond
2026, o cap u e hose di ec ly impac ed by he e o m,14 bu we a e cons ained
by su ey design.15
9 Fo mo e de ail on he su ey see h ps:// ilda. cd.ie/da a/documen a ion/; Kea ney e al. (2011); Whelan and Saa a
(2013).
10 i.e. excluding hose in ins i u ions such as nu sing homes.
11 Weigh s ha ensu e he sample is ep esen a i e o he olde I ish popula ion a e used. Fo a mo e de ailed desc ip ion
o he weigh ing p ocess see Whelan and Sa a (2013).
12 The e was also a special COVID-19 wa e, wi h da a collec ion aking place be ween July o No embe 2020 (TILDA,
2024).
13 A i ion is he main issue when conside ing he op ion o using subsequen wa es. The decision o use Wa e 1 da a
p o ides us wi h he la ges sample size; by Wa e 5 he sample had allen o jus o e hal o he Wa e 1 sample.
14 The en-yea phased emo al o he Yea ly A e age Me hod s a s in Janua y 2025.
15 Sample eplenishmen only ook place in Wa e 6, wi h hese da a no ye being a ailable.
8 | S a e Con ibu o y Pension e o m: winne s and lose s
Ou analysis also conside s he possibili y ha he impac o he e o m migh be
di e en a he couple le el, compa ed o he indi idual. The e o e, we use income
in o ma ion om pa ne s o ou chosen coho o any age. These da a a e only
used o ob ain measu es o couple income, while ou uni o analysis emains he
indi idual.
3.2 MODIFIED TRIAM16
The main measu e o in e es o ou analysis is he p edic ed indi idual S a e
Pension en i lemen a poin o e i emen unde he wo app oaches. We use
in o ma ion on employmen his o y o es ima e he numbe o paid con ibu ions
a SPA, since TILDA does no include in o ma ion on he numbe o PRSI
con ibu ions. The da a include in o ma ion on ime spen unemployed and in
ca ing du ies, which is necessa y o de i e he numbe o c edi ed con ibu ions.17
Using he es ima ed con ibu ions and he o mulas desc ibed in Sec ion 2 we can
calcula e SPC en i lemen s a SPA unde bo h app oaches.
Po en ial losses could be cushioned by p i a e pensions, so we use TILDA da a on
indi iduals’ pa icipa ion in p i a e and occupa ional pension schemes o es ima e
o al pension income a SPA. We assume ha hose wi h supplemen a y de ined
con ibu ion pensions will keep making con ibu ions un il e i emen , and he
con ibu ions will g ow in line wi h p ojec ed ea nings g ow h.
3.3 ESTIMATING PRSI CONTRIBUTIONS
As men ioned abo e, TILDA does no include in o ma ion on PRSI con ibu ions,
and hus hey ha e o be es ima ed based on employmen his o y, bene i
en i lemen and home ca ing pe iods. In all cases, we assume ha he s a us o he
indi idual emains he same o he yea s be ween he in e iew and SPA.18 This
assump ion is examined in mo e de ail in Appendix I.
To al eckonable con ibu ions used o calcula e SPC a e composed o h ee main
componen s; paid con ibu ions, c edi ed con ibu ions and ca e pe iods.
16 Fo a ull echnical desc ip ion o he model see Bei ne e al. (2020).
17 These may o cou se be subjec o e o due o ecall bias.
18 Fo example, i he indi idual is employed a he ime o he in e iew, we conside hem employed un il SPA, and
awa d hem he ele an paid con ibu ions. I hey a e epo ed unemployed a he ime o he in e iew, we assume
eceip o an unemploymen bene i in he yea s be ween he in e iew and SPA and assume c edi ed con ibu ions
o hese yea s.
Da a and he TRIAM Model | 9
3.3.1 Paid con ibu ions
Paid con ibu ions a e PRSI con ibu ions paid du ing employmen o sel -
employmen . We es ima e hem based on how many yea s esponden s epo
spending in paid employmen o sel -employmen since s a ing hei i s job.19
The e was no legal equi emen o sel -employed indi iduals o pay PRSI
con ibu ions be o e 6 Ap il 1988.20 The e o e, i he indi idual epo s s a ing
hei business be o e 1988, we dis ega d hese yea s om hei o al paid
con ibu ions.
3.3.2 C edi ed con ibu ions
PRSI con ibu ions which may be awa ded o a pe son ge ing a paymen om he
Depa men o Social P o ec ion a e e e enced as c edi ed con ibu ions. The
his o ical da a do no p o ide ex ensi e in o ma ion on esponden ’s wel a e
eceip his o y o he yea s hey migh ha e spen sick o disabled,21 so we awa d
c edi ed con ibu ions based only on epo ed yea s spen in unemploymen . As
we assume a pe son’s economic s a us emains unchanged be ween he in e iew
da e and he SPA, anyone epo ing being unemployed o being ill/disabled has
c edi ed con ibu ions acc ued up un il hei SPA is eached. C edi ed
con ibu ions, unde bo h app oaches, can only be coun ed i an indi idual has a
leas 520 paid con ibu ions.22 Unde he TCA me hod, we apply a cap o en yea s
o c edi ed con ibu ions as his is he maximum ha can be awa ded.23
3.3.3 Ca e pe iods
Time spen in ca ing du ies can be accoun ed o unde bo h me hods. Ca ing
pe iods a e ea ed di e en ly unde he wo app oaches.
Unde he YA me hod, an indi idual can a ail o he HomeMake ’s Scheme o ull
yea s spen ca ing o a child unde he age o 12 o a pe son o e 12 who is
incapaci a ed and equi es ull- ime ca e. Only pe iods a e 6 Ap il 1994 can be
aken in o accoun , up o a maximum o 20 yea s. When calcula ing SPC
en i lemen unde YAM we he e o e only include ca ing pe iods a e 1994 and
apply he 20-yea maximum cap. These yea s a e hen dis ega ded in he
19 People epo how long hey ha e wo ked o e hei li e ime. We do no know i all employmen was in I eland.
Indi iduals who wo ked in ano he EU coun y o non-EU coun ies wi h which I eland has a bila e al social secu i y
ag eemen (including Aus alia, New Zealand, he UK and Canada) can combine hei social insu ance paid in I eland
wi h ha paid in hese coun ies. 17 pe cen o ou sample epo ime spen ab oad in hei li e ime. Fo hose who
spen ime wo king in a non-EU/non-bila e al ag eemen coun y we may he e o e o e es ima e hei social insu ance
con ibu ions.
20 Class S PRSI Con ibu ions paid by sel -employed indi iduals.
21 The da a only p o ide his in o ma ion agg ega ed wi h yea s spen in o he ac i i ies, such as no wo king due o
e i emen o being on sabba ical lea e, nei he o which would esul in accumula ion o c edi ed con ibu ions.
22 In o he wo ds, hey mus ha e been employed o sel -employed o a minimum o en yea s.
23 The e is no cap on c edi ed con ibu ions unde he YA me hod.
10 | S a e Con ibu o y Pension e o m: winne s and lose s
denomina o when calcula ing he yea ly a e age, so ha a e age yea ly
con ibu ions will inc ease.
The TCA me hod uses he HomeCa ing Pe iods Scheme, which awa ds
con ibu ions o yea s spen ca ing o an indi idual wi h no da e es ic ion as
unde YAM.24 Al hough he da a p o ide in o ma ion on ca ing pe iods, we do no
know who he esponden s we e ca ing o . Fo ou analysis, we he e o e assume
all epo ed yea s spen in ca ing du ies as eligible o he HomeCa ing Pe iods
Scheme.25 Following he legisla ion, we apply a cap o 20 yea s on he sum o
c edi ed and ca ing con ibu ions.
A e es ima ing he sum o o al, c edi ed and ca e ’s con ibu ion, we use i o
calcula e SPC unde bo h app oaches using hei espec i e o mulas. I we a e
unable o calcula e he SPC unde ei he he YA o TCA me hod,26 he indi iduals
a e d opped om he sample.
Indi iduals who do no ha e enough (minimum o 520 paid) con ibu ions, o do
no sa is y he o he eligibili y condi ions o quali y o SPC, may be eligible o non-
con ibu o y S a e Pension (SPNC). I a pe son is eligible bo h o SPC and SPNC,
hey will ecei e he paymen ha is highe . Gi en ha ou ocus is on he impac
o a change in he calcula ion me hod o he SPC, hose assumed o be in eceip
o he SPNC due o ineligibili y upon eaching he SPA a e d opped om he
sample.27 Those who a e eligible o he SCP bu who a e es ima ed o be be e
o unde he SPNC a e kep in he sample and a e awa ded he highe o he wo,
as he SPNC could play a ole in cushioning he impac in he case o a po en ial
loss.
3.4 PROJECTED INCOME
Fo ou analysis o gains and losses a SPA we need o p ojec u u e income –
ea nings om employmen up o SPA o ou coho o de e mine p i a e pension
con ibu ions, as well as ea nings o younge spouses o calcula e o al household
24 An addi ional e o m o he SPC, he Long-Te m Ca e s Con ibu ion Scheme, was in oduced in Janua y 2024. Unde
his scheme hose ac ing as a ull- ime ca e o a leas 20 yea s can ge Long-Te m Ca e Con ibu ions o he
pe iod(s) spen ca ing o help hem quali y o he SPC. This change is no analysed he e.
25 I is possible o calcula e yea s spen ca ing o child en based on hei yea o bi h ins ead o using he epo ed yea s,
bu his es ic ion would mean dis ega ding any yea s pa en s spen ca ing o incapaci a ed indi iduals o e he age
o 12.
26 This is mos ly due o missing essen ial in o ma ion used o calcula e he con ibu ions, such as he yea o hei i s
employmen o o al yea s spen in employmen o sel -employmen .
27 We iden i y 95 indi iduals who a e no eligible o he SCP. These indi iduals would ecei e he same amoun o SNCP
unde bo h app oaches and a e he e o e no ele an o his analysis. This lea es us wi h a inal sample o 1,832
indi iduals.
Da a and he TRIAM Model | 11
income. To p ojec o wa d SPC and employmen income we use ealised and
o ecas ed28 ea nings g ow h a es adjus ed o in la ion.
We assume ha esponden s epo ed being a pa o a De ined Con ibu ion (DC)
supplemen a y pension scheme annui ise hei und a a a e o 4 pe cen .
Responden s wi h De ined Bene i (DB) supplemen a y pensions ei he epo a
nominal mon hly paymen hey will ecei e a e i emen , o a pe cen age o hei
sala y. We assume ha his is calcula ed as a pe cen age o hei sala y in he yea
be o e e i emen . Fo hose wi h a DB scheme who do no epo hei u u e
mon hly paymen , we impu e a po ion o he sala y ha hey will ecei e om he
ull sample o DB paymen s (including hose who epo a nominal amoun ). We
hen mul iply his a e by hei inal sala y.29
When analysing gains and losses ac oss he dis ibu ion o household income we
need o make he compa ison a he same poin in ime. Ou coho e i es a any
poin be ween 2021 and 2026, so we use he p esen alue o household income
in 2021 o cons uc he quin iles.
28 We calcula e ealised ea nings g ow h om he CSO’s da a on a e age hou ly ea nings up o 2023, a ailable a :
h ps://da a.cso.ie/ able/EHQ03. Fo yea s 2023 o 2026 we use he Depa men o Finance wage o ecas s a ailable
a : h ps://www.go .ie/pd /? ile=h ps://asse s.go .ie/255688/58c34028-0c19-456d-8721-
450 eae59 dc.pd #page=null.
29 Fo ull de ails on calcula ion and p ojec ion o he income componen s, as well as he impu a ion p ocedu es, see he
echnical appendix in Bei ne e al. (2020).
12 | S a e Con ibu o y Pension e o m: winne s and lose s
SECTION 4
Resul s
In ad ance o any analysis i is no en i ely clea i people will, on a e age, gain
when calcula ing hei SPC a e using TCA o YAM. The YAM may be mo e
a ou able o ce ain people due o some o i s ea u es. Fi s ly, c edi ed
con ibu ions a e no capped unde he YAM as is he case wi h he TCA. So, once
an indi idual mee s he ini ial SPC quali ying equi emen o 520 paid con ibu ions
o e hei li e ime, all c edi ed con ibu ions – o example hose ecei ed du ing
pe iods in eceip o unemploymen o disabili y bene i s – a e coun ed owa ds
he o al con ibu ions. This is in con as o he TCA which limi s he numbe o
c edi ed con ibu ions ha can be coun ed when calcula ing o al con ibu ions.30
The YAM will also be mo e a ou able o hose wi h sho e con ibu ion his o ies
who en e ed employmen la e in li e – someone wi h only 520 PRSI con ibu ions
will ecei e he maximum a e o SPC i hese con ibu ions we e ea ned in he
decade o so be o e eaching pension age, while unde he TCA hey will now only
ecei e one-qua e o he maximum (520/2080). This may be mo e likely he case
o women han men – Russell e al. (2009) ound ha he highes inc ease in
emale pa icipa ion a es o e he Cel ic Tige pe iod we e by women in he olde
(45+) age g oups – he e o e, gi en he his o ical issues de e ing emale
employmen discussed ea lie , many o hese women may bene i mo e om he
YAM i hey did no wo k ea lie in li e.
Al e na i ely, he YAM may esul in a lowe SPC en i lemen compa ed o he TCA
due o he ac ha YAM di ides o al con ibu ions by he numbe o yea s
be ween SPC da e and employmen en y da e. We know, he e o e, ha he YAM
is pa icula ly un a ou able o hose who ha e had ime ou o he labou ma ke ,
pa icula ly when ha ime was no spen in eceip o wel a e bene i s ha would
esul in c edi ed con ibu ions.31 This will pa icula ly be he case o hose who
en e ed employmen a a younge age.
30 As men ioned ea lie he maximum numbe o C edi ed Con ibu ions ha can be used is 520/10 yea s o hose wi h
no HomeCa ing Pe iods. Fo hose wi h bo h he combined o al o C edi ed Con ibu ions and HomeCa ing Pe iods
canno be mo e han 1,040/20 yea s.
31 These bene i s a e Illness Bene i , Jobseeke 's Bene i o Allowance, Occupa ional Inju y, Ma e ni y Bene i , S a e
Pension (T ansi ion), In alidi y Pension, P esc ibed Rela i e Allowance, Ca e 's Allowance, Ca e 's Bene i , One-Pa en
Family Paymen , P e-Re i emen Allowance (p io o 4 July 2007), Heal h and Sa e y Bene i , Adop i e Bene i and
Disabili y Allowance.
Resul s | 13
The YAM is also likely o esul in a lowe SPC en i lemen compa ed o he TCA,
pa icula ly o women, as i only akes in o accoun ca ing pe iods pos -1994 when
calcula ing he denomina o i.e. he numbe o yea s be ween employmen en y
da e and SPC da e. Gi en he coho examined he e ( hose bo n be ween 1955 and
1960), and assuming p incipal childbea ing yea s o 20-40, many o hose in ou
sample ha ook ime ou o ca e o child en would ha e had hese ca ing yea s
be ween 1975 and 2000. The e o e, he es ic ion o ca ing pe iods o YAM
pu poses o hose pos -1994 will nega i ely a ec his g oup and he TCA me hod
is likely o be mo e a ou able in ha i allows up o 20 yea s o ca ing pe iods o
be conside ed when calcula ing SPC en i lemen , wi h no es ic ion by da e o
ca ing.
We begin by examining desc ip i e s a is ics o he sample (see Table 3), ocussing
on cha ac e is ics o he sample ha a e likely o a ec a pe son’s SPC en i lemen .
Women and men ended o en e he labou ma ke a ound he same age on
a e age (17 yea s old). Yea s spen in employmen /sel -employmen is signi ican ly
highe o men a 42.1 han women a 34.32 We can see ha ime spen in
educa ion as an adul is low, as a e yea s in eceip o c edi ed con ibu ions (i.e.
pe iods in eceip o bene i s). As an icipa ed, howe e , yea s co e ed by c edi ed
con ibu ions a e highe unde he YAM as c edi ed con ibu ions a e no capped,
as is he case wi h he TCA. Time spen ca ing o o he s, such as child en, is much
highe o women han men. Men spend, on a e age, less han one yea ca ing o
o he s unde bo h app oaches. The impac o he es ic ion o ca ing yea s o
hose ca ied ou pos -1994 is appa en when we compa e he ca ing yea s o
YAM and TCA pu poses o women. Ca ing yea s, subjec o he cap discussed
ea lie , a e coun ed in he TCA app oach ega dless o when hey ook place, so
ha a e age ca ing yea s aken in o accoun unde he TCA o women is jus o e
nine yea s, signi ican ly highe han he i e yea s a e age allowed o unde he
YAM.
Educa ional a ainmen may impac upon he du a ion o a pe son’s wo king li e,
and he e o e a ec hei PRSI con ibu ions. Ele en pe cen o he sample ha e
p ima y-le el educa ion only, wi h 40 pe cen ha ing e ia y. A ound one- i h o
he sample ha e lowe and uppe seconda y le el educa ion.
I is also in e es ing o examine p i a e pension co e age by gende as any losses
ha may be incu ed wi h a mo e o he TCA may be cushioned by he p esence o
p i a e pensions.33 We can see ha o e hal o men will ha e a p i a e pension
32 Bea in mind ha hose wi h insu icien paid con ibu ions, hence a weak wo k his o y, who only quali y o he SPNC
a e excluded he e.
33 We use his e m o cap u e any non-social wel a e pensions – o example occupa ional pensions o hose de i ed
om Pe sonal Re i emen Sa ings Accoun s.
14 | S a e Con ibu o y Pension e o m: winne s and lose s
upon e i emen compa ed o only one- hi d o women. Fo hose who ha e one,
he a e age alue o he p i a e pension is also highe o men a €152 pe week
compa ed o €118 o women.
TABLE 3 DESCRIPTIVE STATISTICS
To al
Male
Female
Age a i s job 17.4 17.3 17.5
Employmen /Sel -employmen (yea s)
38.4
42.1
34.0
C edi ed (yea s) unde YAM
3.4
3.7
3.1
C edi ed (yea s) unde TCA
2.4
2.5
2.2
In educa ion (yea s)
0.6
0.5
0.7
Ca ing (yea s) - YAM
2.6
0.4
5.0
Ca ing (yea s) - TCA
4.5
0.5
9.1
Educa ional A ainmen :
P ima y only
11%
11%
10%
Lowe seconda y
27%
31%
23%
Uppe seconda y
23%
23%
23%
Te ia y
40%
35%
44%
P opo ion wi h p i a e pension
43%
51%
34%
A e age weekly p i a e pension a SPA (excl. 0) €139 €152 €118
Sou ce: Own calcula ions using TILDA da a (Wa e 1) and he TRIAM model.
No es: The igu es shown abo e show he pas incidence o hese s a es since s a ing i s job, as well as he p ojec ed ones o SPA.
Looking a Table 4 we can see ha he a e age SPC ecei ed upon eaching he SPA
unde YAM and TCA o e all emains oughly he same wi h a sligh all om €237
o €235 pe week. Fo men he a e age alls by jus o e 1 pe cen om €245 o
€241 while o women he a e age s ays he same a €229.
TABLE 4 AVERAGE WEEKLY STATE PENSION RATE BY GENDER
YAM TCA
Male
€245 €241
Female
€229 €229
To al
€237 €235
Sou ce: Own calcula ions using TILDA da a (Wa e 1) and he TRIAM model.
Table 5 shows he p opo ion o he coho analysed who will be eligible o he
maximum SPC a e unde bo h he YAM and TCA. O e all we see a ise in eligibili y
o he maximum a e inc easing om 69 pe cen o he sample o 80 pe cen .
This change is d i en by emale en i lemen s; while he p opo ion o males
quali ying o he maximum SPC is unchanged a 86 pe cen , he p opo ion
quali ying o he maximum a e jumps om 54 pe cen o 75 pe cen o women.
This is unsu p ising gi en ha women a e mo e likely o ha e been nega i ely
Resul s | 15
a ec ed by he YAM in ha hey a e mo e likely o ha e ime spen ou o he
labou ma ke due, o example, o ca ing esponsibili ies.
This ise in he p opo ion o ou coho ha would be eligible o he maximum
a e is likely d i en by wo hings – i s ly, he TCA equi es 2,080 con ibu ions (40
yea s o con ibu ions). Gi en he a e age age o i s job being jus abo e 17, many
o hose in ou sample may well ha e had close o 50 yea s be ween age o en y
in o employmen and SPA age o 66, he denomina o in he YAM calcula ion.
Someone wi h a wo king li e o 50 yea s would need a o al o 2,400 con ibu ions
o mo e (2,400/50 gi ing an a e age annual con ibu ion o 48 con ibu ions) o
quali y o he maximum SPC unde he YAM so ha ime spen ou o he labou
ma ke will nega i ely a ec hei a e age con ibu ions. This con as s wi h he
TCA me hod – once he 2,080 o al igu e is eached he maximum SPC is payable.
Secondly, as discussed ea lie , he es ic ion o ca ing pe iods o hose occu ing
be o e 1994 unde he YAM will ha e nega i ely impac ed he women in his
coho aking ime ou o he labou ma ke o ca ing pu poses. The ac ha he
TCA does no es ic he ime pe iod o ca ing will boos hei numbe o o al
con ibu ions and esul s in a ise in eligibili y a he maximum a e.
TABLE 5 PROPORTION ENTITLED TO THE MAXIMUM SPC RATE BY GENDER
YAM (%) TCA (%)
O e all % Male % Female % O e all % Male % Female %
Maximum a e
69
86 54
80
86 75
< Maximum a e 31 14 46 20 14 25
Sou ce: Own calcula ions using TILDA da a (Wa e 1) and he TRIAM model.
Gi en he signi ican ise in he p opo ion o ou sample who will be eligible o
he maximum SPC a e i migh be su p ising o see ha he a e age a e o he
S a e Pensions will ac ually all sligh ly, as shown in Table 4. The banded na u e o
paymen s ecei ed unde he YAM compa ed o he p opo ional na u e o he TCA
helps cla i y he mechanism d i ing his. Table 6 shows he cu en SPC a es pe
yea ly a e age con ibu ion band, along wi h he a es ha would be payable
assuming hese con ibu ions we e ea ned o e a 40-yea ime ame as en isaged
by he TCA. Those wi h 48 o mo e con ibu ions pe yea ecei e he maximum
SPC a e unde YAM. Unde he TCA me hod, and aking he 40-yea wo king li e
ime ame, a ull yea ’s con ibu ions (52 weeks) would be necessa y o quali y o
he maximum SPC a e. The e o e, hose wi h 48-51 con ibu ions pe yea would
ecei e be ween 2 and 8 pe cen less han he maximum. In ac , in each YAM
a e age con ibu ion band, he a e o SPC payable unde he TCA is lowe . This is
pa icula ly appa en as we mo e down h ough he bands. Fo hose wi h
be ween 40 and 47 yea ly a e age, he TCA a e payable would be be ween
€213.60 and €250.60, i.e. 8-22 pe cen lowe han he €271.9 a e payable unde
16 | S a e Con ibu o y Pension e o m: winne s and lose s
he YAM. This pa e n con inues as we mo e down h ough he bands, so ha o
some people he TCA SPC a e payable will be mo e han 50 pe cen lowe han
he equi alen YAM a e. This e lec s he ac ha he YAM is pa icula ly
a ou able a e-wise when compa ed o he TCA o hose wi h lowe le els o
con ibu ions – o example someone wi h yea ly a e age con ibu ions o 26, i.e.
50 pe cen o he maximum, ecei es a SPC o 85 pe cen o he maximum a e.
TABLE 6 AVERAGE WEEKLY SPC RATE, 2024
Yea ly A e age
Con ibu ions
YAM Equi alen TCA a e** % Di e ence TCA YAM
48 o o e (max. a e)
€277.30
€255.97 - €277.3
0% - 8%
40 – 47
€271.90
€213.31 - €250.64
8% - 22%
30 – 39
€249.30
€159.98 - €207.98
17% - 36%
20 – 29
€236.10
€106.65 - €154.65
34% - 55%
15 – 19
€180.70
€79.99 - €101.32
44% - 56%
10 – 14 €110.80 €53.33 - €74.66 33% - 52%
Sou ce: Own calcula ions using ‘Ra es o Paymen 2024’ bookle a ailable a
h ps://asse s.go .ie/11117/6beb1ad2 51346 4ad6 27db1c473e59.pd .
No es: ** based on 40 yea s o con ibu ions.
This nega i e impac may be mi iga ed by some ac o s – i s ly peoples’ wo king
li e may well go beyond a du a ion o 40 yea s. In addi ion, ew people may all in o
hese lowe a e age con ibu ion ca ego ies. The SPNC may also cushion losses o
some – hose wi h a lowe SPC en i lemen may ecei e he SPNC i i is inancially
bene icial o hem o do so. The e o e, we now p oceed by examining he ac ual
gains and losses an icipa ed in ou coho o analysis.
Figu e 1 shows he pe cen age change in S a e Pension en i lemen unde he TCA
compa ed o he YAM. Resul s a e shown by gende and ca ego ised in o ‘no
change’ ( hose who ge he same, o wi hin 1 pe cen o he S a e Pension a e
unde he TCA compa ed o he YAM), and hose expe iencing gains/losses o
be ween 1-10 pe cen and 10 pe cen o mo e.34 We see ha he a e ecei ed
emains unchanged o 83 pe cen o men and 56 pe cen o women. Jus unde
13 pe cen o he sample will ecei e a lowe S a e Pension a e unde TCA wi h
no la ge gende di e ences (14 pe cen o women compa ed o 11 pe cen o
men). As an icipa ed, gi en he anomalies associa ed wi h he YAM, 30 pe cen o
women will ecei e a highe S a e Pension a e unde TCA compa ed o jus 5 pe
cen o men. Mos o hese emale gains, 20 pe cen , will be ela i ely small,
be ween 1 and 5 pe cen age poin s. A non- i ial en h o women will see gains o
10 pe cen o mo e.
34 These bands we e chosen o ensu e su icien sample size in each band.
Conclusions | 23
moni o ed in he u u e o insu e income adequacy o pensione s in he lowes
income g oup.
I should be bo ne in mind ha hese esul s a e based on a pa icula coho o
u u e e i ees, hose bo n be ween 1955 and 1960. As can be seen in he esul s,
he limi a ion o ca ing pe iods unde YAM o hose occu ing pos -1994 had a
pa icula ly nega i e e ec on he women in his coho . La e coho s would be
less a ec ed by his es ic ion, i a all. The e o e, he posi i e impac s on emale
S a e Pension en i lemen s ound in his pape a e d i en, in pa , by his
es ic ion, and mo ing o TCA will likely ha e less o a posi i e impac on u u e
coho s o emale e i ees. In addi ion, as emale pa icipa ion a es ha e isen in
ecen decades, women a e likely o ha e highe SPC co e age in hei olde age.
Reliance on he S a e Pension as he main income sou ce in e i emen is likely o
educe; pension co e age ou side o he S a e Pension has isen in ecen yea s
( o example om 52 pe cen o wo ke s in 2005 o 68 pe cen in 2023).40 Non-
S a e pension co e age is also likely o ise u he as I eland is se o in oduce
au o-en olmen in o pensions sa ings schemes in 2025.
Two o he main changes o he SPC a e also in place since Janua y 2024 ha a e
likely o inc ease SPC en i lemen . The i s allows he de e ing o he SPC o a
numbe o yea s, speci ically be ween 66 and 70. Du ing his de e al pe iod a
pe son can make PRSI con ibu ions which can boos hei SPC a e i hey we e
below he 2,080/40 yea h eshold o he TCA. P io o his, hose wo king pas 66
did no pay PRSI and he e o e could no inc ease hei en i lemen . In addi ion,
hose ca ing o pe iods o longe han 20 yea s can ge long- e m ca e ’s
con ibu ions, ea ed as paid con ibu ions, o boos hei SPC en i lemen .
40 See
h ps://www.cso.ie/en/media/csoie/ eleasespublica ions/documen s/labou ma ke /2005/qnhs_pensionsupda eq12
005.pd and h ps://www.cso.ie/en/ eleasesandpublica ions/ep/p-pens/pensionco e age2023/.
24 | S a e Con ibu o y Pension e o m: winne s and lose s
REFERENCES
Basse , M. (2017). Towa ds a Fai S a e Pension o Women Pensione s, Dublin: Age Ac ion.
Bei ne, K., Nolan, A. and Roan ee, B. (2020). Income Adequacy in Re i emen : E idence, Dublin:
Economic and Social Resea ch Ins i u e: Dublin.
Collins, M. and Hughes, G. (2017). ‘Suppo ing pension con ibu ions h ough he ax sys em:
ou comes, cos s and examining e o m’, The Economic and Social Re iew.
CSO (2024). A ailable a : h ps://www.cso.ie/en/ eleasesandpublica ions/ep/p-
pens/pensionco e age2023/.
Doo ley, K. (2018). ‘Taxa ion, wo k and gende equali y in I eland’, Dublin: Jou nal o he S a is ical
and Social Inqui y Socie y o I eland.
Go e nmen o I eland (2019). A Roadmap o Pensions Re o m 2018 - 2023, s.l.: Depa men o Social
P o ec ion.
Kea ney, P.M., C onin, H., O’Regan, C., Kamiya, Y., Sa a, G.M., Whelan, B. and Kenny R.A. (2011).
‘Coho P o ile: The I ish Longi udinal S udy on Ageing’, In e na ional Jou nal o Epidemiology.
Mosca, I. and W igh , R.E., 2020. ‘The Long- e m Consequences o he I ish Ma iage Ba ’, The
Economic and Social Re iew, Economic and Social S udies, Vol. 51(1), pp. 1-34.
Nolan, A., Whelan, A., McGuinness, S. and Maî e, B. (2019). Gende , Pensions and Income in
Re i emen , s.l.: ESRI.
OECD (2014). OECD Re iews o Pension Sys ems. I eland, Pa is: OECD.
Pensions Commission (2021). Repo o he Commission on Pensions, s.l.: s.n.
Pon hieux, S. (2013). Income pooling and equal sha ing wi hin he household – Wha can we lea n
om he 2010 EU-SILC module?, s.l.: Eu opean Commission.
Russell, H., McGinni y, F., Callan, T. and Keane, C. (2009). A Woman’s Place: Female Pa icipa ion in
he I ish Labou Ma ke . Dublin: ESRI.
TILDA (2024). The I ish Longi udinal s udy on Ageing (TILDA) COVID-19 S udy, 2020. [da ase ]. Ve sion
2. I ish Social Science Da a A chi e. SN:0074-00. www.ucd.ie/issda/da a/ ilda.
Wa son, D., Maî e, B. and Can illon, S. (2013). Implica ions o Income Pooling and Household. Dublin:
Depa men o Social P o ec ion.
Whelan, B.J. and Saa a, G.M. (2013). ‘Design and Me hodology o he TILDA S udy’, Jou nal o he
Ame ican Ge ia ics Socie y.
Appendix I | 25
APPENDIX I
We assume ha ci cums ances o indi iduals do no change be ween ime o
in e iew and e i emen a SPA (e.g. economic s a us, ela ionship s a us). As
explained ea lie we ha e op ed o use Wa e 1 o he da a o ensu e we ha e he
la ges ep esen a i e sample, as he sample size alls signi ican ly by he la es
wa e a ailable, Wa e 5. We can, howe e , examine he economic s a us o hose
indi iduals om Wa e 1 who a e s ill in he su ey by Wa e 5, 1,320 indi iduals.
Table A.1 shows he economic s a us o hose in bo h Wa e 1 and Wa e 5, wi h
he numbe s on he diagonal (in bold and highligh ed) showing he p opo ion o
hose who do no change s a us. The la ges economic s a us ca ego y wi h o e
hal o he esponden s, is he employee g oup. The majo i y, 61 pe cen , epo
s ill being in employmen . While no longe employed, 12 pe cen epo being
ei he sel -employed, unemployed o pe manen ly sick/disabled by Wa e 5 while
22 pe cen epo being e i ed.
The e o e, while i is no possible o know i hese indi iduals con inue o acc ue
PRSI con ibu ions, i is likely ha his is he case – ei he h ough paid sel -
employed con ibu ions o c edi ed con ibu ions i in eceip o wel a e. Some
indi iduals, pe haps aking ea ly e i emen , may also op o pay olun a y
con ibu ions which a e coun ed in he calcula ion o he SPC en i lemen . A simila
pa e n eme ges o he nex la ges ca ego y (17 pe cen o he sample), hose
who epo ed being sel -employed in Wa e 1. The majo i y epo ei he s ill being
sel -employed (68 pe cen ) o employed (17 pe cen ) and would con inue building
up paid con ibu ions.
The only economic s a us ca ego y which sees la ge changes in s a us be ween
Wa e 1 and Wa e 5 a e hose who epo ed being unemployed in Wa e 1. Thi y-
eigh pe cen o his g oup epo being in wo k, ei he as an employee o sel -
employed, by Wa e 5. While we acc ue c edi ed con ibu ions o hese indi iduals
in he decade be ween Wa e 1 and Wa e 5 hey may, in ac , be paying
con ibu ions o e a leas some o his ime pe iod which may a ec hei SPC
en i lemen i hey hi he cap on c edi ed con ibu ions. These indi iduals do,
howe e , ep esen a ela i ely small p opo ion o he o al (8 pe cen o he
sample).
26 | S a e Con ibu o y Pension e o m: winne s and lose s
TABLE A.1 STATUS CHANGES WAVE 1 TO WAVE 5
S a us in Wa e 5
S a us in
Wa e 1
Re i ed
Employed
Sel -employed
Unemployed
Pe manen ly
sick/disabled
Looking a e
home/ amily
In educa ion/ aining
O he
% o Sample
Re i ed 65% 13% 8% 0% 8% 5% 0% 3% 3%
Employed
22%
61%
6%
2%
4%
3%
0%
1%
54%
Sel -
employed
6% 17% 68% 2% 2% 5% 0% 1% 17%
Unemployed
18%
30%
8%
20%
10%
11%
2%
0%
8%
Pe manen ly
sick/disabled
18% 3% 3% 5% 53% 16% 0% 3% 6%
Looking a e
home/ amily
9% 10% 10% 4% 7% 58% 1% 2% 10%
In educa ion/
aining
36% 50% 0% 0% 7% 7% 0% 0% 1%
O he
7%
27%
7%
7%
20%
33%
0%
0%
1%
Sou ce: Own calcula ions using TILDA da a (Wa es 1 and 5).
Appendix II | 27
APPENDIX II
Addi ional G aphs
FIGURE A.1 CHANGE IN STATE PENSION ENTITLEMENT AS % OF TOTAL PENSIONS
Sou ce: Own calcula ions using TILDA da a (Wa e 1) and he TRIAM model.
No es: The ‘No change’ ca ego y includes hose wi h gains/losses o less han 1 pe cen .
FIGURE A.2 CHANGE IN STATE PENSION ENTITLEMENT AS % OF TOTAL PENSIONS, COUPLE LEVEL
Sou ce: Own calcula ions using TILDA da a (Wa e 1) and he TRIAM model.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
-10%+ -1% - -10% No change +1% - +10% +10%+
Male Female To al
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
-10%+ -1% - -10% No change +1% - +10% +10%+
Male Female To al
28 | S a e Con ibu o y Pension e o m: winne s and lose s
FIGURE A.3 CHANGE IN STATE PENSION ENTITLEMENT AS % OF TOTAL PENSIONS, BY
EDUCATIONAL ATTAINMENT
Sou ce: Own calcula ions using TILDA da a (Wa e 1) and he TRIAM model.
0%
10%
20%
30%
40%
50%
60%
70%
80%
-10%+ -1% - -10% No change +1% - +10% +10%+
P ima y Lowe sec. Uppe sec. Te ia y To al
Whi ake Squa e,
Si John Roge son’s Quay,
Dublin 2
Telephone +353 1 863 2000
Email [email p o ec ed]
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Twi e @ESRIDublin
