So if you're planning on hanging up your boots on your 65th birthday, think again.

With the green paper on pensions due from the Minister for Social and Family Affairs, Martin Cullen, this month, the consensus is that we'll see a trial balloon on pushing the retirement age closer to 70.

Only in July Minister for Enterprise Micheal Martin spoke in favour of allowing people to continue working past age 65 . . . a position endorsed as progressive at the time by Age Action Ireland. But the tone of the conversation at the Irish Association of Pension Funds (IAPF) conference last Tuesday suggested we may need to encourage or even require over-65s to keep punching the clock.

Jerry Shanahan, national officer and head of pensions strategy with Unite, the country's second largest union, was blunt about the relationship between retirement and mortality.

"If you can increase the length of time people are in a job, they're more likely to die within the same number of years after retirement [as they used to], " he said. He added, however, that career extension should be voluntary. He was reluctant, too, to fully endorse the concept without some expansion of maximum drawdown.

Ibec's director of industrial relations Brendan McGinty found himself, unusually, in agreement with his union counterpart . . .but was keen to make public sector arrangements part of the debate.

"It's inevitably going to be on the agenda . . . we've already seen some moves towards flexibility, " he said. "How sustainable is it to continue with early retirement arrangements we've seen in the public sector?"

With average public sector pension provision coming in at 25% of salary, state employees may have less to worry about than the private sector, whose pension provision rate averages 11.5%. Ibec, Chambers, the Irish Association of Investment Managers and the IAPF have said they would prefer to see the private sector funded to the same level as the public sector.

"The lack of understanding about the true cost of providing for retirement remains staggering, " McGinty said. That "true cost" only rises as longevity improves, creating an invidious competition between public health and public welfare.

"There is no doubt that at some point we have to look at retirement age, " said Liam Quigley, head of Mercer's financial strategy group. "It's linked fundamentally with the desirability of keeping an older population in the workforce as much as pensions."

Cullen made no reference to retirement age in his address to the conference and a spokeswoman for the department would not say whether the green paper would include any retirement age proposals.

When German chancellor Otto von Bismarck was setting up the first state pension 120 years ago, he wanted to know one key bit of demographic data: what's the average male life expectancy? In order to keep liabilities under control, Bismarck set the retirement age a few years later than the typical worker's age of death. Thus the Iron Chancellor married social democracy to fiscal realism.

Nowadays, life expectancy so far exceeds the retirement age of 65 that even a lifetime of saving may not be enough to fund an annuity for the 20 years or more many pensioners will live after stopping work.

Worse, the state is in no position to pick up the slack. With an aging population, the proportion of people on the wrong side of the retirement divide will grow considerably over the next generation . . . meaning less tax revenue to make up any shortfalls.

THE pensions issue . . . ie only half of us have one . . . has often been described as a "ticking timebomb". If that's the case, then it is being tossed firmly into the laps of employees. Companies are increasingly weaseling out of defined benefit pensions any which way they can . . . leaving their staff the responsibility of funding their retirement.

'Defined benefit' pensions are the Rolls Royce of pensions. They are the only ones that guarantee you a certain level of income in retirement. The other type . . . 'defined contribution' . . . merely set a level of contribution and hope for the best. In today's environment of lower, and increasingly volatile, returns, "the best" is increasingly unlikely to happen.

A new study, by the Irish Association of Pension Funds (IAPF), found that the number of firms offering defined benefit plans has fallen from 67% in 2002 to just 37% today.

Who can blame them? The cost of funding defined benefit pensions has soared and can weigh heavily on a company's balance sheet decades into the future. The bottom line is that if your company has a defined benefit scheme, recognise its worth.

And fight tooth and nail to keep such a scheme when faced with what now seems will be an inevitable attempt to do away with it or water it down. Your company pension can no longer be counted on to pay up the traditional formula of two-thirds of your salary throughout your retirement in return for 40 years of paid-up service.

Nowadays such guarantees are disappearing fast as the emphasis changes from benefit to contributions.

Some DB schemes 13% pay in less than 5% of employees salaries; 17% pay exactly 5pc and 70% pay more. But at least the amount stumped up by employers is increasing compared to five years ago . . . see table . . . which probably indicates a growing awareness of the importance of an employers' pension contributions among employees.

The IAPF report notes that "disclosure regulations will be expanded shortly to provide defined contribution members with the information they require to form this judgement and the IAPF strongly support this." It also welcomed the upward trend in defined benefits as "encouraging".

Furthermore, 9% of respondents stated that they intended to increase the employer contributions into their defined contribution scheme over the next two years. It's up to employees to make sure that they do.

Exerting pressure is one way, but we have to pay attention to what goes into our pension plan as much as we do about what goes into our pay packet.

Employers can't be expected to increase their funding of what is a vital part of our remuneration package unless we appreciate it as such.

Almost 200 schemes in trouble. . .

NEARLY 200 defined benefit occupational pension schemes have not accumulated enough assets to meet their funding liabilities, according to Pensions Board chief executive Brendan Kennedy, who said trustees of the schemes are not taking enough account of risk in their quest for return.

Speaking at the Irish Association of Pension Funds annual conference last Tuesday, Kennedy said 192 pension schemes have failed the funding standard, which means they will not be able to meet their obligations within the next three years.

He said these schemes showed a mismatch between their investment mix and liabilities . . . and trustees were not paying attention to the discrepancy.

"We would expect a rough relationship between the bond content and liabilities, " he said. "There should be some evidence that trustees take the liability profile into account, but I don't see any."

The greater a schemes payment liabilities, the higher the proportion of bonds should be in its asset mix.

Kennedy said trustees needed to balance the need for return with the risk of falling further behind in their obligations, but "there are many schemes where we don't see evidence of an investment process".

All trustees should carry out a simple test, he said, by asking the following questions: what would happen if the scheme fell 15%? What effect would this drop have on solvency? What would the employer's response be?

He said the fact the 192 schemes were in trouble was a sign that employers either could not or would not meeting funding requirements.

. . . but some deals still available

AS the October 31 deadline approaches, watch out for low cost deals on pensions.

But some brokers were already offering deals as we went to press.

John Geraghty of www. labrokers. ie is offering to set up single premium pension on a nil commission basis for an execution only fee of 150.00.

"I have an Eagle Star offer for single premiums: with a 107.75% allocation and a 5% bid offer." (This means a net gain of 2.75% for you). The annual management charge is a low 0.75%. The only downside is that there is also an exit charge if you get out early ranging from 4%-1% over one to four years.

Geraghty is also selling standard PRSAs from Eagle Star, Irish Life and Hibernian on a nil commission basis with no execution only fee.

"This means that the only charge is the 1% annual management charge. In some cases this annual management charge decreases as the fund builds up. There is no fee charged for this service but, again, it is execution and you will not get the benefit of advice and you have to know and understand exactly what you want.

Charges on pensions range from 0.75% a year and up to 5% upfront (as commission or what is known as bid/offer spread. ) To complicate matters further, these can be offset by increased "allocation" rates. For example, you may be charged a b/o spread of 5%, but you get an extra 3% allocation rate, which brings your net outlay to just 2%.

However, a direct sales outfit such as Quinn Life (www. quinn-life. com) is a lot simpler. It has no upfront charge at all - just an annual management fee of 1% - 1.25% depending on the fund you go for.

The downside is that this is an execution-only service, ie there will be no advice or hand-holding through the process.