asked the Minister for Social Welfare if the Government have considered the report of the National Pensions Board; if it is intended to implement the recommendations of the report; and if he will make a statement on the matter.
15.
Ceisteanna—Questions. Oral Answers. - National Pensions Board.
11.
asked the Minister for Social Welfare if he proposes to adopt the proposals of the National Pensions Board; if so, when a Bill to give effect to their proposals will be introduced; and if he will make a statement on the matter.
24.
(Limerick-East) asked the Minister for Social Welfare the plans he has for the urgent introduction of a National Pensions Bill; if the recent development in the world's equity markets gave rise to any anxiety about the viability of an Irish occupational pensions fund; and if he will make a statement on the matter.
55.
asked the Minister for Social Welfare whether the interim proposals of the National Pensions Board are to be implemented; and if he will make a statement on the matter.
I propose to take Questions Nos. 11, 15, 24 and 55 together.
The first report of the National Pensions Board was published in April last. Following the publication of the report, I asked all the major interests involved, namely employers, trade unions and the pensions industry, for their views on the various proposals in the report. I have now received the views of all the organisations consulted and these are being examined. I hope to be in a position shortly to put definitive proposals before the Government.
The board have made wide-ranging proposals for the future regulation of occupational pension schemes under a number of key headings. The views of the majority of those organisations who made submissions following the publication of the board's report were in support of the board's proposals. There were differences in regard to the appropriate timescale for implementing the proposals.
The implementation of the board's recommendations will involve complex and detailed legislation. In preparing proposals for legislation my priority will be to ensure that the security of workers' pension rights is adequately safeguarded while, at the same time, ensuring the continued development of occupational pension schemes.
The security and long term viability of occupational pension schemes is extremely important, not only for the members of those schemes but also because of the important role which pension funds have in the economy. Short term fluctuations in the financial markets can obviously affect the investment performances of funds in the short term. Pension funds, however, are long term in nature and the important thing from their point of view is that they achieve adequate long term returns on their investments. It would be my intention that the measures which are brought into operation arising from the National Pensions Board's report will sustain and improve the situation of pension funds in the future.
Is it envisaged in setting up the board that there will be a full time chief executive officer? Also, will there be provision for the disclosure of certain information to scheme members? I think the Minister mentioned that point in his answer but I did not get it clearly.
The National Pensions Board are at present in existence and are working. The arrangements which will follow their final report will be a matter for the Government at that time; in other words, the long term system of regulation. Whether such a board will continue, or another variation of it, is something which will arise from the long term report.
Would that require legislation to be placed before the Dáil?
That would depend on whether they were a statutory or non-statutory board. Obviously, if they are to have statutory powers, that would require legislation. In any event, the Pensions Bill will be coming in in the near future to regulate occupational pensions schemes and a whole series of measures in relation to the regulation and control of these matters.
Would the Minister agree that this subject is one of the most urgent issues facing him and his Department because of the possible lack of security in some occupational pensions schemes and the lack of regulation governing them? If he shares my view on the urgency of the matter, would he agree to give top priority to this legislation, with the assurance from this side of the House that any legislation will be fully facilitated?
I thank the Deputy for that offer of co-operation. Certainly, it is my intention to treat the issue as particularly urgent. As the Deputy will be aware at present we are doing a number of things which involve major changes in social welfare. This is one of them. I had hoped to have the complete views of all the bodies earlier so that the legislation could be prepared very early in this session. I now expect it to be available very shortly.
In relation to the security and the importance of the funds, I agree with the Deputy that funds are very important in the economy. The total value of funds invested on behalf of pension schemes is currently estimated to be of the order of £5 billion.
It was £10 million two months ago.
As a matter of interest, a recent report was published by Davy Kelleher McCarthy Limited on the taxation of pensions. This tentatively estimated the breakdown of investment as follows: overseas investment, 20 per cent to 25 per cent; Irish Government stocks, 45 per cent to 50 per cent; company equities, 20 per cent to 25 per cent; and property, 5 per cent to 10 per cent. These are global estimates, but they give some idea. There is certain security built into them. For instance, almost 50 per cent are in Government stocks and pension funds really are a long term business. It is also worth bearing in mind that they earned impressive returns in the eighties.
If the Minister takes account of what happened with regard to Irish Shipping, he will be aware from that case that just because schemes have gone on for a long time that does not mean they will go well in the future. I suggest this is a most serious and urgent matter and I hope no pensioners will blame him for his delay in enacting legislation.
In the realisation that the pensions area is very complex, would the Minister consider introducing legislation quickly, both to protect the security of existing pensions schemes and their value and in regard to vital changes in the 1984 legislation dealing with insolvencies and the 1980 regulations dealing with take-overs? These are matters which require to be dealt with now rather than in a year's time.
Yes, I agree with the Deputy and I hope to be in a position to put proposals in that area before the Government shortly.