Proinsias De Rossa
Question:15 Proinsias De Rossa asked the Minister for Finance when he will receive the report of the public service pensions commission; and if he will make a statement on the matter. [13847/99]
Other Questions. - Pension Provisions.
Question:
17 Mr. Coveney asked the Minister for Finance the plans, if any, he has to implement the recommendations of the pensions commission; and if he will make a statement on the matter. [13829/99]
I propose to take Questions Nos. 15 and 17 together.
The Commission on Public Service Pensions was established in February 1996 and made its interim report in November 1997. The commission was originally asked to make its final report to Government in 1998. However, due to its wide ranging terms of reference, which require it to consider pension provisions across the whole Public Service, the commission has not found it possible to adhere to this deadline. I expect the commission will be in a position to submit its final report within the next few months.
The question of implementing any recommendations which may be contained in the commission's report will be considered once the report has been received.
I do not know whether the issue of funding public service pensions into the future and making prior arrangements for such funding is contained in the pensions report. In a number of responses to parliamentary questions in the past six months, and in his budget statement and the supplementary material provided with it, the Minister implied that surpluses currently available to Government would be used for the purpose of making such provision. Will the Minister confirm that is the case?
The range of issues to be considered in the commission's report will include pension funding. When the commission was set up in 1996 its terms of reference were to examine a report on the pension terms of public servants employed in the Civil Service, non-industrial and industrial sectors, Defence Forces, Garda, education, health and local authority services, having regard to the present and future costs arising under schemes financed by the Exchequer. The matter will be addressed by the pensions commission.
I have referred to the second issue in the past. While we have a different demographic profile to the rest of Europe, we have an opportunity to examine these problems. I commend the last Government for setting up the McAleese commission which will address one of these problems.
At a separate level, we are also looking at the pre-funding of State social welfare pensions. While the demographics are in our favour, we should look at this rather than fall into the problem, as happened in the rest of Europe. There are problems with public service pensions but they will not occur until 2010.
Frequently people talk about funding pensions for teachers, civil servants and gardaí who now contribute to their pension schemes although the Government does not retain a pension fund in the Exchequer. Other people are talking about those who pay PRSI and argue that there should be an insurance fund for pensions and other withdrawals from PRSI. I would like the Minister to distinguish between the two and to comment on his thinking on both areas.
The Deputy is correct. There are two problems which are sometimes confused in the public mind. There is the funding of civil and public servants' pensions, the area on which the McAleese commission will report, and there is also an interdepartmental working group established as a result of the National Pensions Policy Initiative, under the auspices of the Department of Social, Community and Family Affairs, which is examining the idea of setting up a fund for social welfare pensions. They are two distinct funds. Both matters are being considered.
What I said earlier still applies. Due to our demographic profile, we have an opportunity to address both problems. With good economic growth and budget surpluses, it is time we looked at them. Other European countries fell into that problem. We can avoid that.
I draw the Minister's attention to the fact that the duration of his replies cannot exceed one minute.
The McAleese commission will not investigate or make recommendations on social welfare pensions. As both the PRSI Vote and the Department of Social, Community and Family Affairs Vote are now in surplus, this is a budgetary matter and the Minister would be well advised to set up such a fund. He could consider this for the next budget.
The McAleese commission only deals with public service pensions. When the National Pensions Policy Initiative reported to the Minister, Deputy Dermot Ahern, two working groups were set up. One of them is looking at this matter. The Deputy made a valid point about the surplus in the social insurance fund. That could be considered. Later this year, however, the working group will report on social welfare pensions and the McAleese commission will report on public service pensions. We can make provisions then. My views on the matters are well known.
I understood that the Department of Social, Community and Family Affairs was obliged to maintain a fund for any surplus moneys which might be available to it. Is that the case?
At the end of last year there would have been a surplus on the fund. It is anticipated that there will be a surplus at the end of this year also due to the buoyancy of PRSI receipts.
Is this simply a bank account?
It is known as a social insurance fund but that is not the same as a pension fund, where the funds are invested. At the moment the social insurance fund consists of surplus funds in a bank account. Some interest will accrue to it but it is not an area which is within my remit.