The National Insurance Fund is projected to be exhausted by 2045 if no changes are made, Treasury officials have warned.
Director of National Insurance David Ireland told the Public Accounts Committee the latest Government Actuary report forecast the fund “runs out in 2047 48” but further modelling has moved that forward by two years.
“We’re now looking at an exhaustion date of 2045 46,” Mr Ireland said.
The pressures are driven largely by the triple lock on state pensions, which guarantees increases by the highest of inflation, earnings or 2.5%.
“The triple lock, there doesn’t seem to be a single article that’s ever been produced at the moment that says the triple lock is sustainable,” Mr Ireland added.
Chief Financial Officer Caldric Randall clarified the fund acts as a buffer rather than a traditional pension pot.
“If the National Insurance Fund ran out, pensions will still be paid,” he said. “Any amount over the national insurance that had been collected would need to come from general revenue.”
Treasury Minister Chris Thomas told the committee that the issue must be a priority after the general election.
Mr Ireland noted the last time general revenue contributed to the National Insurance Fund was 1989.
The Isle of Man has no auto-enrolment private pension scheme, leaving future retirees potentially more reliant on the state system.