Actuarial Review of the Social Insurance Fund 2005 - Department of ...

Recent Developments2.1 Current Financial Positionof the Fund2.1.1 The previous review of the Fund wascarried out at the end of 2000 and coveredthe projection period 2001 to 2056. At thattime, the Fund had accumulated an excessof contributions received over benefits paidout, such that the Fund’s assets at the endof 2000 were €855 million.2.1.2 Over the five years since the last review,the Fund’s income, by way of contributions,has continued to exceed expenditure,such that at the date of the currentreview (31 December, 2005), the Fund’saccumulated net assets had increasedto €2,400 million. While this is clearlya material asset, it is very small in thecontext of the annual flows of benefits andcontributions. Appendix B summarises theincome and expenditure of the Fund overthe 5 years since the last review.2.2 Benefit and ContributionLevels2.2.1 The projections used for this review arebased on the benefit and contributionlevels effective from January, 2007.Appendix A provides more details of thesebenefits.2.2.2 In addition, allowance has been made forthe increase in the Maternity Benefit periodto 26 weeks in 2007 as well as changesto the contribution conditions requiredto qualify for State pensions from 2012onwards.2.2.3 The Homemaker’s Scheme was introducedin 1994 to help people who provide careto qualify for pension benefits. Any gapin their contribution record relating to aperiod of homemaking will be ignoredwhen calculating the average number ofweeks to determine their benefit.2.2.4 In general, benefit levels have increasedsignificantly over the review period. Inparticular, the State Pension (Transition &Contributory) has increased from €147.30per week in 2002 to €209.30 per week in2007. Other benefits have also increasedmaterially over the review period.2.3 Recent MigrationExperience2.3.1 A very material change in the migrationpatterns affecting Ireland has occurred inrecent years. For the previous review, netinward migration was assumed to be at15,000 per year in 2001, declining to zero by2017, and remaining at zero thereafter.2.3.2 For many reasons, not least of all thefinancial prosperity of Ireland relative toother countries (particularly the new EUAccession States), the actual experienceover recent years has seen far moremigrants to Ireland than the previousreview anticipated. This is a highly materialissue for the Fund and is covered in moredetail in Part 5 of this report.2.4 Longevity Improvements2.4.1 At the last review of the Fund,allowance was made for future expectedimprovements in mortality experience.It is now generally agreed that theimprovements forecast at the time haverecent developments18