Dáil Éireann debate -
Wednesday, 16 Jun 1976

Vol. 291 No. 8

Superannuation and Pensions Bill, 1976: Second Stage.

Question proposed: "That the Bill be now read a Second Time."

Minister for Finance (Mr. R. Ryan)

The primary purpose of this Bill is to facilitate administration of the superannuation code for established civil servants by enabling changes to be made by way of statutory regulations and schemes instead of the more elaborate process of enacting fresh legislation every time it is found necessary to alter the provisions.

The memorandum circulated with the Bill provides a brief explanation of its various provisions. While I do not propose at this stage to go into these provisions in detail, I would like to comment on what is really the main provision of the Bill, that is, section 2. At present, the superannuation terms for established civil servants are embodied in the Superannuation Acts, 1834 to 1963, involving, in all, 20 separate Acts. There are also a number of other enactments which either extend the terms of the Superannuation Acts to cover non-civil service groups or affect the administration of those Acts. The relevant superannuation provisions are therefore spread over a wide range of Acts, including amending Acts. This leads to difficulties in administration and, of course, makes it practically impossible for the generality of civil servants to view their pension terms as a whole. The Bill will enable all such provisions to be brought together in due course in a comprehensive statutory scheme, and any future changes in the code will be done by way of amending schemes as found necessary.

Initially, schemes will be made under section 2, in respect of the ex gratia and contributory widows' and children's pensions schemes. The contributory scheme was introduced for the civil service with effect from 23rd July, 1968, while the ex gratia scheme became effective from 1st October, 1969. The Dáil gave its approval, by means of a Supplementary Estimate, for the financial aspects of those scheme. The statutory schemes will provide the appropriate legislative cover.

The principle of embodying superannuation terms in a scheme, rather than in statute, is not an innovation in the public service. Matters have been arranged on this basis for national and secondary teachers, the Garda Síochána and the Army for a considerable time. In the Teachers' Superannuation Act, 1928, there is a provision whereby the Minister for Education may make schemes for, or in respect of, national and secondary teachers. A similar provision for the Garda Síochána is contained in the Police Forces (Amalgamation) Act, 1925. Pension schemes may be made for the Army under the Defence Forces (Pensions) Act, 1932. Accordingly, the embodiment of pension terms in a scheme rather than in statute is simply an extension of a principle already widely used in the public service.

The non-civil servants included under section 2 have civil service superannuation terms already applied to them by specific Acts and their inclusion in the Bill means that any future changes in the civil service code may be automatically applied to them.

I should like to refer to another important decision which is contained in section 3, subsection (1). This enables certain enactments to be amended by regulation so as to provide statutory cover for a number of superannuation improvements, principally those effective from 1st June, 1973, which result from my acceptance in 1974 of agreed recommendations made during the previous year by a joint working party on superannuation. This cover is of a temporary character pending the making of the consolidated scheme under section 2. I might mention that the codification and simplification of the civil service superannuation code will be a long and complex task, but I think all will agree that it is a task well worth while undertaking.

I am happy to be able to sponsor this Bill and I recommend it to Dáil Éireann for favourable and speedy consideration.

Mr. Colley

On the face of it, this Bill appears to be largely an enabling Bill, enabling superannuation arrangements to be incorporated in schemes rather than in statutes, and to be changed with a greater degree of ease by way of statutory regulation rather than by new legislation from time to time. In so far as that is the purpose of the Bill, there is no objection on this side. On the contrary, we support that proposal.

There are, however, one or two matters on which I should like some more information. One, I should like the Minister's assurance that the Bill, except to the extent that attention has been drawn to it either by him, in his statement, or in the explanatory memorandum, does not alter the terms of existing pensions provisions.

Mr. R. Ryan

I can give that assurance.

Mr. Colley

Two, I note that the Minister accepted a recommendation by a joint official staff-side working party set up under the conciliation and arbitration scheme for the civil service that superannuation should be on a more flexible basis similar to that governing pay and other conditions in the service. I have no doubt this was desirable, but perhaps the Minister could give some indication of why such an arrangement was made. In other words, what were the difficulties experienced which lead to such a recommendation being made? Presumably it was thought that superannuation should be put on a more flexible basis because the existing requirement whereby a Bill has to be passed by both Houses was too cumbersome, but, apart from being cumbersome, were there other difficulties which required such a recommendation to change the whole basis of dealing with superannuation in the civil service and in bodies to which the civil service superannuation regulations apply and deal with the position by way of statutory regulation rather than by way of statute.

I appreciate that the bringing together of all the existing superannuation provisions in a comprehensive statutory scheme would be a difficult and complicated task but could the Minister give any indication as to when it is thought likely such a comprehensive statutory scheme may be available?

I want to take this opportunity of adverting to the position of what I describe as ex gratia widows of civil servants. Can the Minister hold out any hope of an improvement in their situation? After considerable argument and discussion, it was agreed by my predecessor in Finance that the widows of civil servants who died prior to a particular date in 1968 would be entitled, without contribution, to a pension equivalent to half that to which their husbands would have been entitled. Subsequently those concerned agitated very strongly to be put on the same basis as the widows of civil servants who died subsequent to that date. They advanced some quite cogent arguments in favour of that.

I, as Minister for Finance, met representatives of the widows concerned and, as a result of my discussions with them, I decided it was necessary to ascertain exactly what would be involved from an actuarial point of view if one accepted the proposition they put forward and I commissioned an actuarial report. That report became available shortly after the present Minister assumed office and, in reply to a parliamentary question by me, the Minister stated that the report indicated that the cost of doing what was asked would be prohibitive.

There are two aspects to which I want to advert. The first is that many of the widows are now elderly and quite a number must have died since this situation arose. Furthermore, the case made was based in general on what they believed to be an injustice and they argued they should at least get an opportunity of contributing in the same way as did those who came after them in order to put them on the same basis. I confess I was not entirely satisfied with the interpretation of the actuarial report by the Minister and his advisers. I believe it should be possible to work out a suitable arrangement whereby the ex gratia widows could make a contribution from what would be due to them thereby enabling them to be put on the same basis as the widows of civil servants who died subsequent to a particular date in 1968.

It would be unreasonable to expect the Minister to deal in detail with this matter at this stage but I am concerned because time is passing. Many of these widows have died. Others are getting on in years and are trying to exist in many cases on quite small pensions. Some resolution of this problem should be achieved without delay. The matter is mentioned specifically in the explanatory memorandum and I urge the Minister now to reconsider the position he has taken in this regard. It should be possible to work out a solution which would not cost anything like the sum mentioned by the Minister in his reply to me. I strongly urge the Minister to review the situation once more to see if a satisfactory solution can be arrived at. I believe it can. I do not think it can be arrived at by a strict adherence to the letter of the law but, given a little flexibility in the Minister's approach and in the approach of the ex gratia widows, a reasonable solution could be found.

Since this Bill is aimed at producing a more flexible approach in regard to superannuation it is appropriate to urge on the Minister a more flexible approach in regard to the superannuation of ex gratia widows. I am not making this plea with a view to political kudos. I do not believe there are political kudos in it. Indeed, if that were my object, I would make quite a different case and refer to things that happened in the past. I am not doing that. There is a problem and there is an element of injustice involved in a number of cases. though not in all cases, and a special effort should be made to resolve the problem before it is resolved simply by the death of the people concerned. Subject to that and to other points I have made, we on this side have no difficulty in accepting this Bill.

Mr. R. Ryan

The very high rates of all taxes in this country and the very large borrowings which the State has to make are a direct reflection of the cost of maintaining existing services. This is a cause of public anxiety. In that situation it cannot be reasonably argued that we should improve existing services. To improve them would require further taxation and further borrowing. As a community, we will have to accept the reality that our resources are not sufficient to meet the cost of present services, much less the cost of improvements in them.

While the most worthy reasons can be advanced for increasing expenditure on a large number of services, and while humanitarian reasons can be advanced for increased expenditure on a number of services such as pensions for widows, the harsh reality has still to be faced that, while our community are demanding more and more services, they are unwilling to pay for them, and the cost of improving the pensions of pre-1968 widows, if it had to be met in full by the Exchequer, would be another £3,250,000. I am not aware of a readiness on the part of anybody in this community to make his or her contribution to that fund and all the other expenditures which the public are demanding. It is not the Minister for Finance who is declining to improve the position of any pensioners. It is our community who persist in complaining about levels of taxation for services which they are demanding. As a nation, we have to overcome that fault. Until we overcome it we will have continuing community unhappiness, unrest and discontent.

I dealt at length yesterday, in reply to a parliamentary question, with the possibility of giving pre-1968 non-contributory widow pensioners the same pension as is paid to post-1968 contributory pensioners, and I explained that in equity it could not be done.

Mr. Colley

The Minister said he dealt with it yesterday?

Mr. R. Ryan

Yes. There was a parliamentary question on the matter yesterday.

Mr. Colley

I am sorry.

Mr. R. Ryan

I know Deputy Colley raised the matter on a previous occasion, but I dealt with it extensively yesterday and pointed out that it involved an extra £3,250,000 to make the concession and that if that concession were made it would mean that those who are at present contributing to a scheme for contributory widows' pensions would press that, as others were now receiving equal pensions without making a contribution, they who are at present making a contribution should be relieved of the obligation of doing so. That would cost another £1,500,000. Therefore, ultimately to grant the concession which has been sought, and which I in my generosity would love to give, would mean an additional bill of £5 million. I also pointed out that I had approached the staff associations concerned to see if they would agree to making a contribution towards the cost of improving the pensions of pre-1968 widows, but I did not receive agreement to make such contributions, so that it is clear the full cost would have to be borne by the general body of taxpayers, including many taxpayers on comparatively smaller incomes than the unsatisfactory pensions which are paid to pre-1968 widows.

Mr. Colley

Did the Minister examine it from the point of view of contributions from the widows themselves?

Mr. R. Ryan

Yes I have, and the actuarial report to which Deputy Colley referred and which incidentally is based on figures of 1972, so that it is not a true measure of what it would cost now, has also been considered. The person who would need most help is the poor widow with the greatest responsibilities and such a person is unlikely to be in a position to make the contribution necessary to qualify for a contributory pension; and if the better-off were enabled to do it, again it would undoubtedly generate greater discontent and a sense of resentment on the part of those who were poorer.

Mr. Colley

It is not as simple as that, as the Minister knows.

Mr. R. Ryan

Basically, it comes down to such a simple situation. The Deputy knows that I am very well disposed, that I am not saying what I say because I am harsh in my approach or heartless. I have to spell out what the cost is, what the problems are.

Pay in the public service is a matter which is largely determined by negotiation and arrangement outside of statutory control. Ultimately, of course, the bill in relation to any improvements has to be met by the money being voted by the Oireachtas. The Dáil, very properly, under the Constitution has absolute control over all money Bills and all matters affecting the collection and disbursement of revenue. However, it seems to me that it would maintain an anomalous position to allow the greater part of the public service expenditure on the pay front to be free of detailed statutory control, while the smaller part which relates to pensions would continue to be subject to the statutory straitjackets contained in 20 different Acts. The function of this Bill, therefore, is to tailor a new suit for the superannuation element in public pay and to offer the same management of the pension fund as is available in relation to pay. That is the principal purpose of this Bill, and it will enable a more comprehensive code to be written and presented to the people who are understandably interested in their future income prospects.

Mr. Colley

Can the Minister give an indication of when the comprehensive statutory scheme might be ready?

Mr. R. Ryan

We hope to have it ready early next year. As the Deputy will appreciate, it is a magnum opus. As we are preparing it, we do not want to leave anything out or put in anything which should not be there. The Bill is not purporting to make any changes but the mere codification of the very complex superannuation schemes is quite a heavy piece of work. However, I hope we will have it ready next year.

Question put and agreed to.

An Leas Cheann Comhairle

When is it proposed to take the next Stage?

Mr. R. Ryan

Now.

Mr. Colley

We agree on the basis that the Bill is simply enabling the existing scheme to be codified.