Public Service Superannuation (Miscellaneous Provisions) Bill 2004 [Seanad]: Report and Final Stages

I move amendment No. 1:

In page 5, between lines 24 and 25, to insert the following:

"1.—Upon the passing of this Act, the Minister shall take such steps (not involving a charge or potential charge on public funds) as appear to him or her to be appropriate to give to persons likely to be affected by the provisions of this Act information regarding the principle terms of this Act.".

In moving this amendment, I ask the Minister of State if the Government will clearly indicate that it will take steps to inform people about the very significant changes that arise in certain employments as a result of this Bill. Effectively, this Bill when it is enacted on 1 April, will create two classes of public servants, namely, those appointed to the public service before that date and those appointed after it. As I stated on Committee Stage, many people are absent from the public service for a variety of reasons, in some cases because they have taken leave of absence.

I drew the Minister's attention to the situation in which people go to work in Africa or a developing country by arrangement and may leave their jobs in local authorities as engineers or in hospitals as nurses or doctors and carry out very valuable work overseas. The Minister set out to reassure me that such situations are covered, some of which I accept. However, I am still concerned that, considering lifestyles nowadays, there are people who are absent from the public service and may be away trekking in the jungles of Borneo as part of being out of the public service for a number of years. They will not hear about this and, as a consequence, will not have a chance to address what may be significant changes for them in the event of this Bill being passed.

Deputy Bruton and I have tabled amendments which seek to protect the interests of people who have already served more than 15 years in the public service. On Committee Stage, I also stated that this Bill has a particular impact on doctors because of the way in which that profession organises its study and qualification arrangements. When doctors who are effectively training to become specialists or consultants are in the later stages of their study, they need to be employed abroad. Very often, in the period before they go abroad, they are employed on a series of contracts, they then go abroad to get further experience and are not able to come back to Ireland until such time as a consultant or near-consultant post is found for them in the public service. Many of these doctors work exclusively in the public service. Much discussion about doctors centres on those consultants who have lucrative employment both in the public service and in private medicine. However, many doctors in the public service work there almost exclusively. The impact of their having left the medical services and returned at a future date to take up further employment, even relatively well-remunerated employment, is that their earlier service in public medicine will not count towards a continuum of service. Their earlier public service will be in one category and their later service in another.

In the next five to seven years we are going to have to compete with a reforming British national health service which is having large sums of money pumped into it by the Chancellor of the Exchequer. The British Government has set ambitious targets for the recruitment of medical and nursing personnel from around the world. Meanwhile, we are creating one more element by which we will be less competitive in recruiting these vital people. This will affect doctors and, to a lesser extent, nurses, because nurses tend to have a slightly different employment pattern from doctors.

When the recommendations of the Hanly report were Government policy before the Minister for Defence torpedoed it and the Taoiseach orphaned it at the Fianna Fáil Ard-Fheis, 3,000 new consultant posts were to be created. This was to be one of the major reforms in addressing the issue of junior hospital doctors and their overtime. The Irish Medical Organisation has made a detailed submission on this issue. The secretary of the IMO attended the select committee when Committee Stage of this Bill was being debated and listened intently to the arguments put forward. In private discussion afterwards — and I am sure the Minister of State is aware of this — he said that the consequences of the Bill for future recruitment to the medical services are particularly negative.

The purpose of the amendment is to limit the damage the Bill will do to the recruitment of medical personnel who have gone abroad. Will the Minister undertake an intensive campaign to advise people working abroad and their families in Ireland that these changes are under way and that they have six months from 1 April to address the issues which arise from these changes if they return to the public service in Ireland after 1 April 2004?

This is an example of one arm of the Government, the Department of Finance, fighting against the declared policy of another arm of the Government, the Department of Health and Children. It is difficult to see where the savings will be made. The contracts will be renegotiated to reflect the lesser pension contributions and the fact that new people entering the service will have a shorter pension lifetime and broken service. Once the link is broken, their earlier service will not be as valuable because there will be a definitive break in which the period before 1 April will count for some service but the period after 1 April will be a different kind of service. The implications are contradictory. The Department of Health and Children will face negotiations and go back to the Department of Finance while the Minister for Finance will express his usual bewilderment as to how €9 billion has disappeared into the Department of Health and Children. Administrators will prepare reports on what has happened to the money but the doctors and nurses who work at the coalface will not be in place.

The implications of this measure have not been teased out. The strategic management initiative has been ongoing for almost ten years. The Hanly report stated that we must address the issue of medical recruitment into the public service at consultant or sub-constultant level while this legislation significantly changes the terms and conditions of employment.

The Minister for Finance decided to include the Garda training period in the qualifying period of public service. Gardaí in training are, therefore, included. Why do the same conditions not apply to people undergoing teacher training, medical training, which is especially protracted, or training as psychiatric nurses, which is a dedicated nursing service and will remain so for some time to come? None of these groups is to have its training period included in calculating its employment period.

Like the cut in the widows' pension, this is a mean cut. People have already embarked on periods of training or applied to teacher training colleges. Many more mature students who have experience in business or in computers are turning to the teaching profession. Now that benchmarking has increased teaching salaries, the teaching profession has become attractive once again to people in their twenties who are thinking of an alternative career. This is one of the most progressive developments in the economy. We need good teachers who love to teach and who like to work with students. We need young people coming back into the teaching profession. Nevertheless, the Government says that, if one trains as a teacher at the age of 26 or 27, having worked at other jobs, one's training period will not be included in one's employment record. The same applies to a person who qualifies in a trade and then turns to teaching that trade. The professor of engineering in UCD began his working life as an apprentice mechanic, worked his way to become the head of engineering in Mercedes-Benz and was headhunted by UCD. What are we saying to people who take a less than regular career path and do not qualify and begin working immediately? If such people work in the public service, we are saying that, from now on, if their date of entry into the public service is after 1 April 2004, they will be seriously disadvantaged.

The Bill arises from the pensions review and there is a broad acceptance that pensions must be reformed. However, some of the cuts imposed in this structure are unnecessarily mean and go against quality recruitment into the public service. The public service unions will seek to address this by means of negotiation and the Bill will go back to the Department of Finance. Who is to say what form the Bill will finally take.

In moving this amendment I ask for a proper information programme in partnership with the trade unions involved, especially the teaching, medical unions and psychiatric nursing unions because they are worst affected. The Minister should undertake a proper information campaign so that people who, for one reason or another, have broken their connection or are abroad, or their relatives, will have a chance to hear that from 1 April they have six months to address their situation if they are currently away without clear leave of absence arrangements, that they are breaking their service and that it could have negative consequences. The Minister indicated on Committee Stage an openness to discuss this issue and I hope he will confirm that in his response to this amendment.

This amendment seeks to ensure that people affected by this legislation will get adequate information about it. It is an important amendment which Fine Gael is pleased to support. I have seen cases where people who worked in the public service and who were misinformed gave up their rights to a spouse's pension. I know that was an issue in the Defence Forces. People who were not properly informed of the implications of some of their decisions entered into agreements to opt out of schemes which would have given cover for their spouses. Their spouses are now paying dearly for the fact that they did not ensure their spouses were protected. I know of tragic cases in my constituency, which underlines the importance of people being properly informed about the decisions they make about pensions. Deputy Burton is right that this must also be done here.

Pensions are like ivy roots in that it is only when one starts to pull that one discovers how much comes up, although one thought it was a relatively simple decision. We have seen complex cases, such as those relating to medical servants who go overseas or to people who opt out on a temporary basis and who later find that their rights have been compromised because of decisions they took without full understanding. It is important that the Minister introduces protocols and advisory material so that when people have to make important decisions which will influence their longer-term rights, they are properly informed.

It is a tragedy that this Bill does not encourage mobility between the public service and the private sector and vice versa. It penalises people who worked in the public service and who decided to go into the private sector for added experience, but who might now like to go back to the public service where they can use their experience. I can think of many people who worked in the private sector but who could go back into education, for example, because they have much to offer. The Bill does not seek to secure mobility, transferability or portability, as it is referred to in terms of pensions, between the public and private sectors.

I am pleased to support this modest request, given the many implications the Bill will have for individuals. There should be a proper information campaign to support this proposal.

I am disappointed that, once again, I have received a letter from you, a Cheann Comhairle, advising that all my amendments have been deemed out of order. It is difficult when one is dealing with public service pensions. The net effect of my amendments would have been to improve the situation or at least to keep it as it currently stands for those in the teaching, nursing and psychiatric nursing sectors and the other areas which will be dramatically affected by the measures in this Bill. Any of the amendments I tabled would likely have had some effect in terms of the Exchequer. On that basis, the amendments were ruled out of order. It makes it difficult for Opposition Deputies to play a fulsome and——

Perhaps if we deal with amendment No. 1 now, there will be an opportunity to make a brief comment when we reach the amendments. We can take a comment from the Members who submitted amendments. We should deal with amendment No. 1 now.

As you suggest, a Cheann Comhairle. I tabled five amendments, but all of them have been ruled out of order and I am deeply concerned about that.

I support amendment No. 1 which seeks to ensure the dissemination of information to the widest possible body of people who would be affected by the measures entailed in the Bill. It should be noted that the Minister did not table any Report Stage amendments, despite all the well-pressed arguments which were put to both the Minister for Finance and the Minister of State at the Department of Justice, Equality and Law Reform, Deputy Brian Lenihan. None of the arguments has filtered through to their thinking. That must be of great regret not only to Members here and to the professions affected, that is, the teaching and nursing professions, but also to those who depend on those professionals to provide education and care. There is unquestionably a major price to be paid.

Amendment No. 1 seeks a proactive exercise — I wonder if that is too much to expect — by the Minister and his Department to inform people who have been in the public service in previous years and for whom there will be unquestionably a real and potentially severe monetary effect by the passage of this Bill.

If they are not aware of it and if they have plans to return to the system at some point in the future——

What monetary effect will it have?

We must take on board that they will not be adjudged as in continuum of service, but will be regarded as new entrants.

What monetary effect will it have?

The Minister of State should allow the Deputy to make his point. The Deputy should confine himself to amendment No. 1.

The Deputy should read the Bill.

Their entitlement to pension rights at a given age, which has already been negotiated through hard trade union negotiations and bargaining with a succession of Governments, will be dwindled away in this exercise. People who may have long-term plans to return to the system here will find that the circumstances of their return to employment within the service will have changed dramatically.

It does not only apply to those in teacher training and in the nursing professions who are currently in training for acute hospital or psychiatric nursing. Those young people who have made a professional and career choice and who, in many cases, have up to three years of service, will be adjudged by the measures in this Bill to be new entrants. This is a serious slight on the commitment and career choice of those who give a professional service, particularly in the nursing area where they are already in direct contact with those in need of care. They have been brought into a profession under the terms they understood applied. However, all that will change before they exit through the qualifying or training modules which will conclude for the current year in May. That is a serious situation.

We will have the opportunity to address some of these issues as Report Stage proceeds, as the Ceann Comhairle said. I support amendment No. 1 in the name of Deputy Burton. I hope it does not prove to be too onerous a task for the Minister and his colleagues.

We have, essentially, had a Second Stage debate in the past 20 minutes. This is Report Stage and the amendment——

The Leas-Cheann Comhairle did not rule in that way.

I was not asking the Chair so to rule. I wish to discuss the amendment which provides that the Minister shall take such steps, not involving a charge or potential charge on public funds, as appear to him or her to be appropriate to give information to persons likely to be affected by the provisions of this legislation. I cannot accept the amendment. Deputy Burton will understand that the stipulation concerning public funds could prevent advertising and other measures to publicise the changes being introduced. However, I appreciate that the Deputy formulated the amendment so it would not be ruled out of order. I congratulate her on that and on not suffering the sad fate of Deputy Ó Caoláin whose amendments were ruled out of order.

Do not dance with such glee. We are trying to do some service for people.

I must remind the Minister of State occasionally.

The Minister intends to publicise the changes in the Bill by all appropriate means. The Minister's Budget Statement was his first public announcement on this subject and it is freely available in the media and on the Internet. The Department of Finance has already written to other Departments alerting them to the changes which will result from the enactment of the Bill. The letter outlined the procedures for Departments to follow to ensure that all persons who take up duty on or after 1 April 2004 are informed of their position. In addition, a draft information note was supplied to all Departments to issue, in advance of 1 April 2004, to persons who are current candidates for appointment to bring to their attention the fact that changes are proposed in superannuation and retirement ages. Departments were asked to convey the information to all relevant public service bodies under their aegis.

In like manner, the Civil Service Commission has for some time notified entrants to Civil Service recruitment competitions of the possibility that altered pension arrangements will apply to new recruits. It is intended, by public advertising through the newspapers, to advise the public of the implications of these changes. However, Japanese soldiers were found in the jungles of Borneo 30 years after the end of the Second World War unaware of the fact that the emperor had surrendered in 1945, so I cannot give the House an assurance that those in the jungles of Borneo will be made aware of the provisions of this Bill. Nevertheless, a reasonable effort will be made by the Minister, through the media, to alert retired public servants to the implications of this measure.

I regret interrupting Deputy Ó Caoláin, but the reason I did so was that a fallacy appears to be pervading both what he and Deputy Burton said, namely, that persons are disadvantaged by this measure. This legislation arises from a recommendation from a pensions commission which suggested that, in light of demographic changes which will be well under way in forthcoming decades, we should extend the pensionable age for the great majority of public servants to 65 years. Deputy Ó Caoláin referred to the hard-earned rights obtained after struggles by the trade union movement. There is no diminution of any of those rights under this legislation.

The group to which Deputy Ó Caoláin and Deputy Burton referred is a group of departed public servants. They are persons who have already resigned from the public service. Let us look at the situation if this Bill were not enacted. Those persons resigned from the public service in full knowledge of the pension implications of that decision. That decision has already been taken by those individuals. To suggest that they are disadvantaged by this measure because they might arrive back into the public service as new entrants is to misconstrue entirely the situation that arises from the provisions of this Bill. The Bill introduces a new pensions regime for new entrants.

Another argument was made and I will deal with it because Deputy Ó Caoláin's amendments on this topic were ruled out of order. It was the contrast between those who are already enlisted in the Garda College and the other prospective candidates for the public service who might wish to become teachers, nurses and doctors. There is a world of difference between a mere expectation that one will take up a particular post on completion of a professional or academic course or training and an actual right to engage in that occupation. It is a fundamental difference. The position in the Garda College is that on completion of the course, the garda is entitled to serve as a member of the Garda Síochána. That is not the position of a student in a teacher training college or a person undertaking a degree in nursing.

Deputy Ó Caoláin, as his party's spokesperson on health, is well aware that many who obtain the new qualifications in nursing do not necessarily work in a hospital setting. They work in many other settings in private or public employment. None of the qualifications that were mentioned goes beyond an expectation that the holder may enter a particular occupation affected by this legislation.

We must accept that the greater number do so.

The greater number may——

The greater number do. The Minister of State is splitting hairs.

There is a world of difference between legislation dealing with rights and that dealing with expectations.

The Bill has a long-term focus both in terms of the savings it will yield and the expected endurance of the provisions generally. The publicity exercise arising on enactment is likely to be once-off and, on that basis, it would not be appropriate to include, as an integral and permanent component of the Bill, a provision on dissemination of information.

The Minister's reply gives me an enhanced understanding of why the health service is in a shambles. He does not appear to understand that the Bill constitutes an important change in the employment rights of people who enter the public service after 1 April. I do not know if the Minister is choosing to be wantonly ignorant but I explained at length that, in the case of a number of professions, we are apparently anxious to recruit quality personnel. I offered the example of psychiatric nurses, teachers and medical doctors. The structure of their recruitment and of their education is such that they are often required to go abroad to train for certain periods. This is particularly the case for medical professionals.

We are competing with medical services throughout the world for quality doctors. We have a problem in that we cannot recruit the doctors we have trained at great expense in our medical schools. They are working in other parts of the world, waiting for years to secure a consultant post and return home. I attended a meeting last night in my constituency, which is also the Minister of State's constituency, attended by approximately 90 people. It was held in a health board facility. The cause of the crisis, which appears to have been resolved, was the failure to recruit a child psychiatrist.

The health boards are spending thousands of euro trying to recruit people from around the world but the Department of Finance, in a failure to achieve a cohesive policy, is cutting off the nose of the Department of Health and Children, as it were, with these terms and conditions simply to save a few pennies and to emphasise that it is the big Department. The Minister of State said this is not a change in the conditions of employment but, in future, public servants will have to work to the age of 65 years to draw a pension. Previously, if people had started working at 16 or 17 years of age, they could retire after 40 years' service. Somebody who has worked in the public service or in any service for 40 years is entitled to collect his or her pension.

The Deputy's second contribution is confined to two minutes. However, the proposer of the amendment is allowed to speak again after the Minister.

I will finish on this. For the Minister of State to suggest that this is not a change and that, therefore, there is no need for a major information campaign is wrong.

I did not suggest that.

The Minister of State said that notices were being sent to Departments to give information to new entrants. I am concerned about the people who have already been in the public service and, for the reasons I described, are now abroad. How are we to contact them? The Minister of State did not say that an audit had been done in each Department of how many people will be affected. As Deputy Richard Bruton rightly pointed out and as all of us who run clinics know, superannuation issues are unbelievably complicated. Without getting into the nitty-gritty of each case, I would not like to call whatever number of people will be affected by this. However, each public service organisation should do an audit to find out and approach those who are likely to be affected by this. The Minister of State could show a more positive attitude.

The Minister of State rightly pointed out that I hold the health portfolio as well as that for finance. We are already competing on the world stage in trying to attract back many people who have worked within our health services but have gone to other areas of the globe to enhance their experience. We are now competing with jurisdictions, including the neighbouring island, that have an earlier retirement age than we will have. How are we ever going to attract people back into the services here where full pension entitlement will not kick in until much later? Not being eligible for a pension until the age of 65 will make an already difficult project even more problematic in the future.

I will give an example. The recent advertisement for the appointment of a dermatologist to a hospital in the north-east region attracted one applicant who subsequently did not take up the position. That is the reality. This will be evident, especially in the health area, over the next number of years. This legislation will make a very difficult project even more difficult. The people who suffer will be not only those whose contract of employment will have changed but those who depend on the services they offer. Students currently in the system, whether in teacher training colleges or in the nursing professions, both medical and psychiatric, must be viewed as existing staff. The smallest concession the Minister of State and the Minister for Finance can make is to recognise those already in training up to the time of the enactment of this legislation.

I would argue that much more should be done. We must recognise that trainee nurses who have opted into the services on the basis of the terms and conditions then applying have made a commitment and a career choice. Now they will find that the terms and conditions are to change. That is patently unfair. Let us think about those in nursing. The Minister of State was happy to say that not all will come within the general acute hospital service. However, the greater number will and I believe the Minister of State was seeking to bring the debate up a cul-de-sac. The reality is that psychiatric nurses, to take that body of trainee nurses as an example, are already contracted out to each of their respective health boards. In the course of their training they are obliged to provide a period of paid clinical placement. They are already in place as paid clinical supports in a number of psychiatric service institutions that operate throughout the jurisdiction. The argument must therefore be that, if we have recognised them as paid clinical providers during the course of their training, surely that is a further strong argument for recognising them as part of the current workforce and not as new entrants coming in after a date in April.

I appeal to the Minister of State to reconsider. I cannot believe there is jousting on this. Recognising the special reality of young teachers and nurses in training in both the medical and psychiatric services is the least that should be done. They have the right to be adjudged in exactly the same way as young gardaí in training. It is most unlikely that there will be any understanding of the position the Minister of State and his colleagues have taken on this matter. It is beyond my appreciation.

I did not reply to Deputy Richard Bruton on the portability of pensions and transferability between the private and public sectors. This Bill will not lessen the potential for transfers of pensionable service in any way. The scope for transfer between the private and public sectors was improved under the terms of the Pensions (Amendment) Act 2002. This Act, which was introduced by the Minister for Social and Family Affairs, introduced a new facility whereby transfer value payments can be made from funded pension schemes, mostly private sector schemes, to non-funded pension schemes, which are the predominant form of scheme in the public service.

Regarding the matters raised by Deputies Burton and Ó Caoláin, let me postulate for the benefit of Deputy Burton the example of a consultant doctor. Nothing in this Bill prevents such a person from aggregating past and future service. There is no difference in the treatment of service which results from this legislation. The difference relates to when the pension can be paid. If a doctor has 20 years' service, resigns to take up a position overseas, returns to the public service in this State after 1 April 2004, serves a further ten years and retires at the age of 62, he will have the option of taking an immediate pension at the age of 62 based on the first 20 years' service and a subsequent pension at the age of 65 based on the second ten years or waiting until age 65 and taking a pension based on 30 years' service. Individual circumstances and the final salary will determine what is more favourable.

When a person resigns from a public service position, he or she cannot assume that his or her terms and conditions will remain unchanged if he or she subsequently competes for and is appointed to that job on a second occasion. That is fundamental pensions practice. To read anything else into that provision and try to transform those provisions of the Act into a general debate on the health service makes me despair about the future of the health service if the Deputies opposite find themselves exercising office in a Government because it is not at the heart of the issue of the future of the health service. It is pension policy based on a Government commission that made recommendations about it.

Regarding future recruitment difficulties, there is no evidence to suggest that an increase in the minimum pension age will deter future entrants to the public service. It will apply throughout the public service. We are legislating in a particular demographic context in which there is an ongoing increase in life expectancy. That affects the capacity, willingness and desire of people to undertake certain occupations. It is not noticeable among Members of this House whose must obviously be a stressful one. It is noticeable in many other contexts. Deputy Burton referred to teaching and the number of older people who want to return to the profession. That reflects one of the reasons this Bill was introduced in the first place, namely, the need to accommodate those prospective demographic changes.

A very tenuous evidential base has been constructed for the proposition that this Bill has any impact on the future of the health service. The question of the impact of the provisions of the Bill and the arguments in regard to all the different professions were canvassed at length by the commission which preceded the introduction of this legislation. There is no question of the Hanly report or the Department of Health and Children being on one side of this argument and the Department of Finance being on the other. There is no doubt there are other contexts in which vigorous arguments are made between those two Departments but this is not one of them. The provisions of the Bill do not affect the overall position. What we are doing is laying down a pensionable age and as I said already, the question of the years of service is not affected by this legislation. It is unreasonable to say that a person who resigns can have a settled expectation that he or she can return precisely on the same conditions in terms of point of duration of service and point of retirement age. It is far-fetched to suggest that a legislative change we introduce here will have the far-reaching implications that Deputies Ó Caoláin and Burton have canvassed in that regard.

Deputy Ó Caoláin re-entered the world of disallowed amendments. I will re-enter that world with him and say that there is a fundamental difference between the position of a member of the Garda Síochána in training and the other occupations. The difference is that the Garda recruit in training is, for all practical purposes, assimilated as a member of the force. That is why it is not a question of providing a special or anomalous exception for them as against others.

Psychiatric nurses are in paid clinical service.

It is a matter of draftsmanship and respecting the basic distinction between a person who is entitled to a particular position and a person who is not and between a person who is a candidate for a position and a person who is accepted into a position.

I do not disagree with the Deputy on that.

The Minister has confirmed the points we were making. The Bill does constitute a very definitive change in service conditions. The Minister would be right if he argued that these changes will not take effect for a considerable period of time. On that I would agree with him.

There are certain elements of the Bill which the Labour Party does not have a difficulty with, for instance, the entitlement of people to work for a longer period of time. However, to go back to the amendment the Labour Party has put forward, we have called for this information precisely because this Bill has enormously important consequences, particularly for the type of case the Minister outlined. Should that doctor return before or after 1 April, for the next ten or 20 working years he or she will find his or her pension conditions significantly changed depending on whether he or she is an entrant before or after 1 April 2004.

When the Minister for Finance introduced the idea of the Bill on budget day he spoke, as he always does, very robustly about this being a great reform which would effectively curtail some of the rights of people like teachers. He did not specifically mention doctors or psychiatric nurses at the time but this Bill will curtail the pension entitlements of people, particularly in those categories. The reason we concentrated on those categories is because those categories of employment have particular characteristics which mean that in many cases people who end up working in those professions until they are 65 may no longer be capable of giving the service they could once give.

There are enhanced retirement facilities, and I am happy the Minister confirmed they will remain in existence, but nonetheless these are considerable diminutions in the rights associated until now with the work done by people like psychiatric nurses. I repeat that if somebody joins the psychiatric nursing service, trains at a young age and spends 40 years in the service, under these changes proposed by the Minister, Deputy McCreevy, and Fianna Fáil, that person will not be entitled to draw a pension should he or she become a psychiatric nurse after 1 April. That person will not be entitled to draw a pension until after he or she has reached the age of 65. Up to now, if they had 40 years' service having started in the service somewhat earlier and younger, they were entitled to draw the pension from the date of the completion of the 40 years.

Psychiatric nurses have very onerous duties in regard to patients who are often seriously ill and who need specialist care. The patients involved may be very robust. Unlike medical patients in an acute medical hospital these patients may not be weakened by their illness. They may be physically exceptionally robust. Some people who work as psychiatric nurses will find that having served until they are aged 65, their capacity to contribute as they might once have been able to do is very limited.

In terms of the 40 years it must be remembered that the general arrangement for public service pensions is to retire on half pay. In the example the Minister of State gave, he talked about somebody only having 30 years' working service in this country because as a consultant the person was entitled to go abroad. Thirty 40ths, now split into two different qualifying periods with different qualifications attached, means that in regard to the first period they have 20 40ths divided by two and for the second period they have ten 40ths divided by two.

That brings me to another point that the INTO in particular raised. In negotiations the Government promised that arrangements would be put in place for enhanced contribution schemes for people, particularly those joining the service late or those going into teaching in their late 20s, who may have had protracted periods of study or other employments. Their serviceable years may well be topped at 30 or even 25 years. The Government promised to put in enhanced savings opportunities for those people.

The purpose of the amendment is to give people information. The Minister will have seen the study this week which shows that in the seven years of Deputy McCreevy's budgets, this Government has significantly increased the attractiveness of private pension schemes for the very wealthy. There have been fewer advancements for people on more modest incomes and the financial services industry has ensured that the AVC schemes are quite attractive from a tax point of view. The financial services industry charges extremely high fees whereas proprietary directors of companies can look forward to putting aside a few million euro over a ten-year period for a pension scheme.

The Minister, Deputy McCreevy, like most of his budgets, has doled out additional benefits year after year to those people but in regard to the people who in many ways are the glue that knits our community together — the teachers, psychiatric nurses, doctors and other essential professionals — and who are not earning vast amounts of money and are not involved as proprietary company directors, the Government is reducing their entitlements while failing to introduce additional pension savings schemes to ensure they will not be fleeced by the financial services industry.

The costs of buying AVCs to people on modest incomes are truly stunning. Very often people's first and second year of contributions are almost eaten up by fees and they are also at the mercy of the vagaries of the international stock markets, and we know what has happened to them. This measure shows again the right wing cloth from which the Government is cut. I hope that if the Minister of State conducts the information campaign the Department will actively seek people, through the Departments and public institutions, who may be adversely affected by this and who, unless they are informed, may not seek to protect their positions.

I am loath to make a definitive statement on such a complicated topic because in my experience as an accountant and a public representative, each case is different and one needs tomes at hand to work it out. The Minister of State is aware of this as a lawyer. He should not state definitively that no one is suffering as a result of this Bill. Teachers, psychiatric nurses and doctors are getting a raw deal. Moreover, at the pensions commission the Government made promises to the social partners to allow people catch up on what they will lose through this Bill but it has not done that.

How is it that every year under the stewardship of the Minister, Deputy McCreevy, the Government can give extra, significant and costly benefits for wealthy people investing in and buying pensions, while the ordinary punter cannot receive those benefits? This week already, for the sake of an extra €5 million, we have seen widows deprived of benefits to which they contribute through their work. Nevertheless, every year the Minister ladles more benefits into the 2,500 self-applied pension schemes which can benefit only those with a couple of million euro to invest in pensions.

Meanwhile the Government penalises student teachers, nurses, psychiatric nurses and doctors over their protracted period of study, leaving one to conclude that Fianna Fáil minds the wealthy. It does not care for widows or ordinary people, although it once did. Having worked with my colleague, Deputy Woods, in the Department of Social Welfare I can say that were he still Minister there is no way the Department of Finance would have pulled the stroke against widows that it pulled in the budget. Someone of the calibre of Deputy Woods would not have allowed that to happen.

The Deputy is departing from the amendment.

Will the Minister of State accede to the Labour Party's reasonable request for a proper information campaign?

Amendment put and declared lost.

I move amendment No. 2:

In page 6, to delete line 6.

This amendment deals with the definition of "new entrant" under this legislation. The pensions commission rightly considered our ageing population and that people have a longer life expectancy than in the past which will pose problems for the funding of pensions in the long run. The European working population will fall by 10% over the next 20 years, which will have a dramatic impact on the workforce, with a knock-on effect on retirement ages. That poses problems in planning for pension obligations. It is prudent that we have the commission to address these issues.

The Minister of State is rather like Tom Thumb, or was he the nursery rhyme character who stuck in his thumb and pulled out the plum, ignoring the less palatable part of the pie? That is evident in this legislation. The pensions commission proposed that we raise the pension age for new entrants but it made other proposals that must be borne in mind too. It proposed that all Governments would carry on their budgets, on an accrual basis, the true cost of public service pensions as if they were paying the full contribution now. That would make us start to provide enough Government savings to ensure the economy was strong enough to meet these obligations in the long term. It did not propose moving to pay-as-you-go but said that we need to save and invest to build the economy, address our infrastructural problems and so on. That proposal has been airbrushed out of consideration. The Minister of State did not refer to it in the debate. It also proposed that those of us who are already in the system and have acquired pensionability on the existing rules would pay more in the way of a contribution. That too has been airbrushed out. It also proposed that we take a more adaptable approach to working on retirement.

Would the Deputy like us to put it back?

It is easy to take away the things that are unpopular but the context is that we were telling new entrants they must make new arrangements and we would all take up some of the slack. Those of us inside were to contribute more, the State would make more provision in savings for the long term and we would have more flexible attitudes to working in retirement throughout the public sector with many changes which are not mentioned in the Bill. The Minister of State indicated on Committee Stage that he intends to introduce some of these, such as not determining the pension according to the retirement salary, which has an extraordinarily deadening effect in forcing people to stay on even if they would like to move to less onerous responsibilities as they grow older.

Younger people listening to this debate will say that those of us inside the system are pulling up the ladder behind us and in effect preventing them from gaining the benefits we enjoyed. That is why those training for nursing and other professions say, with good grounds, that this is unfair and they are being singled out. The commission had a wider view but we have opted for one change. It is not kicking any sleeping dogs, as the Minister of State says. It is the easiest thing to get through but one can see why the definition of young entrant worries people in the psychiatric service who hitherto could retire after a certain age. Now those in training for that profession must face different terms.

It is good politics to define all on the basis of new entrants and forget about the other proposals but is it a fair interpretation of the commission's recommendations? Is it fair to the new entrants who are defined differently from those who went before them? I recognise that change is necessary and much of the Bill is correct and inevitable, and the Minister of State has articulated clearly how he picked certain dividing lines. He is an experienced lawyer and defends his case well. At a human level, however, I can see why people in training now think that this definition selects them for particular treatment and is causing resentment. This is so, particularly when the Minister of State defines those training as gardaí as different because they have a contract of employment whereas trainee nurses who can, with a few exceptions, go only to the public sector are defined differently. They are effectively training for public service contracts and to say they are different is beside the point. This provision creates genuine difficulties and those of us inside the tower, so to speak, are pulling up the ladder behind us. The proposal is causing resentment, particularly among those training to be teachers, nurses or other professions which are almost exclusively in the public service.

I suppose the Minister will reply that one cannot make an omelette without cracking eggs and that this provision must be made to address the issue. The pensions commission had a more balanced approach. I regret that the Minister has not addressed the issue of funding pensions on an accrual basis because now the State must put aside more money in savings to provide for when we are older and will be a burden on the younger generation. This important issue could be called an intergenerational equity although it is not an immediate equity issue yet. That recommendation of the commission has been ignored but it is an important balancing argument. Having gone through the issues previously, I know the Minister will stick stoutly to his definition and that the nurses and teachers must stay out while the gardaí are defined otherwise.

The original negotiations entered into by the Minister, or others on his behalf, indicated that there was some flexibility around retirement age and there was talk about a band of retirement age between the ages of 62 and 67. Unfortunately, because of amendments being out of order, as already mentioned by Deputy Ó Caoláin, we have not been able to tease out the scope for exploring the flexibility that originally existed on the side of management. We have not been able to see whether we could have got a deal which would promote a more healthy attitude to working on after retirement and which would provide a range of choice which would be good for the public service without imposing insupportable burdens on the State in the long term. I regret we did not get this opportunity. The Ceann Comhairle said he will not allow us to talk about the reason these amendments were ruled out of order but the fact they were ruled out constrained the debate on this and Committee Stage.

The crucial issue is that we should promote new working arrangements which will allow people to continue to work and to enjoy and benefit from it up to and beyond 65 years of age. We need to make the changes which will make this a choice people will want to take. The Minister should be more active in promoting this. During Second Stage debate I pointed out how little mobility we encourage in the public service. Only one in five promotions are from outside Departments. This will get worse with decentralisation and virtually no recruitment will take place from outside the narrow range of people on site. This is not a healthy way to promote the development of a good working environment.

Pension provisions could make a difference and create a more healthy attitude towards staying on at work, recruitment, mobility within the service and advancement promotion. Many issues could be improved and made more dynamic through sensible pension reform. However, the Minister has adopted a very narrow canvas in this regard. I may be wrong with regard to Tom Thumb; perhaps the Minister of State has read the nursery rhyme more recently and he can correct me with regard to who actually pulled out the plum. However, people currently in training are justified in the sense of wrong they feel and the Minister should try to address the issue.

I am quite disappointed at how unimaginative this Bill has been. Those people who took part in the consultation process on pension reform must feel cheated. To return to the issue of trainee teachers, nurses and doctors, if students do their leaving certificate at the age of 18 and then start a four or five-year training course for a degree or trade, they will be approximately 22 years of age when they qualify and get their first employment, perhaps in the public service. If those students then spend their working lives in the public service, they will have completed 40 years service at approximately 62 years of age. If somebody has completed a full 40 years in the public service at the age of 62, it is tough on him or her to be told he or she cannot take up his or her pension entitlements. These people will have to work until they are 65 years of age before they can take up their entitlements.

The INTO, because of the younger age of primary teachers, drew attention to this issue during the pensions commission discussion. I know these teachers will have accumulated their pension rights at the age of 62, however, they cannot take them up under the dispensation. For example, primary teachers who began a job last September and who will have accumulated 40 years' service at the age of 62, will be able to collect their pension. However, primary teachers currently in training who only commence working next September will not be able to collect their pension at the same age after accumulating 40 years' service. Although these people are only a year behind their comrades in the training college, they will have to work until they are 65 years of age or else leave the public service and wait until they are 65 years of age for it to be paid to them.

This proposal creates an invidious distinction between two groups of people. I do not know what the term "disimprovement" means to Fianna Fáil. However, this proposal constitutes a disimprovement in my language. With regard to both groups, who is better off? Is it those who got their job last September or those who get their job next September? I am sure the same is happening in the nursing training colleges. People graduating this March will be taken on by the health boards and will qualify for their pension after 40 years service. However, those recruited to the service next May or June, following the 1 April changeover date, will be forever different and will not be entitled to draw their pension until they are 65 years of age.

The Minister for Finance has argued that this is necessary. Why has the Minister not delivered any compensating mechanisms whereby the person recruited after 1 April will be entitled to make additional contributions to take into account what is happening without being charged usurious fees by the financial services sector for AVCs? The Minister's argument was that by the time any of this happens he and all of us will be long gone and it will not matter, but it will matter. This is one more disincentive for people in terms of quality and commitment to work in the public service as primary teachers, psychiatric nurses or doctors. In each case the conditions will be significantly disimproved if people are recruited after 1 April.

It is a great pity in terms of pension reform that three groups of workers should be particularly disadvantaged when they are so important to society and when there are features peculiar to their recruitment. This argument was accepted in the case of gardaí and I do not understand why it cannot be accepted in regard to the three professions to which I referred.

Top level public servants, Secretaries General of Departments, who are mostly men, have looked after themselves. They have extraordinarily attractive enhanced pension arrangements built into their seven-year recruitment deals. The same is not true of the average teacher, psychiatric nurse or doctor who will serve the community without going above principal officer level in the Civil Service. The Secretaries General of the Civil Service, the Sir Humphreys, have made sure they are well looked after. We must also remember that for the most part, when their seven-year contracts are up, to draw on a point made by Deputy Richard Bruton, they find lucrative subsequent employment chairing commissions and doing various other jobs for Government. Good luck to them. However, the cost to the public service of their compensation packages is high. They are well looked after which is not the case with nurses, teachers and doctors. While many of the Bill's provisions are good, the legislation is deeply regrettable for that reason.

I support Deputy Richard Bruton's amendment which refers to the definition of a new entrant. The Bill represents a further disincentive to recruitment to the public service. A significant extension in the years of service will be required of those who work in the public service in order to qualify for a full pension, specifically in the areas of teaching and nursing and particularly in the psychiatric sector. Doctors have also been mentioned.

What is the driving force behind the Minister's wish to see these fundamental changes? Estimates put the savings at €300 million in terms of public service pensions, but we have not seen a definitive calculation. What is the incentive for bringing about such a disimprovement in the terms of employment that will apply to these important professions? My concern is not alone for those involved in teaching or nursing, but for those who depend upon them.

As Deputy Richard Bruton stated, it is not so long ago since we were at school and we all have some recollection of those teachers who were the most able and impressive in terms of teaching practice. The proposed extension of the retirement age is not evenly applied. The retirement age for teachers is being moved from 55 years to 65 years. This is a jump of ten years, as against five years in other sectors. It is important that one has the choice of being able to retire on a full pension. There are tremendous stresses and demands on those involved in the teaching profession, as there are in the nursing professions. I do not have any doubt that some people employed in the teaching profession, for a range of sane and sensible reasons, would seek to take up the option of early retirement, but without penalty, as is the case at present, having reached the age of 55 or the corresponding service years. Representatives of teaching organisations were prepared to accept some change but not the punitive ones proposed, which will have consequences not only in terms of a disincentive for people to join the teaching profession, but also that teachers will be obliged because of pension need to remain in service up to the age of 65, when in some cases they might have been better to opt for early retirement. Young people will suffer as a result. Their future is our future. A terrible legacy is involved in all that is now proposed. The same case should apply to them as applies to the Garda Síochána and the Prison Service — the Minister of State can correct me if the latter group is not included.

It is also unfair to suggest that nurses, especially psychiatric nurses, must now continue in service up to the age of 65 to qualify for a full pension. There are certain areas of work where there is a need for a balance between experience and physical and psychological fitness. There is no question but that in later years one's level of fitness abates. In the psychiatric service it is important that people are fit in both mind and body for the work and challenges they face.

It is a serious failure not to recognise the particular case of those already in training as teachers or nurses. Part of the training programme in the case of nurses involves paid clinical placements within health boards. On the one hand we acknowledge them as paid professionals providing a clinical service, while on the other we claim they have no status and, as of 1 April next, they will only be viewed as new entrants. This is a punitive measure as well as being discourteous and disrespectful to those who have already made a decision to choose a certain profession.

I reject the Minister of State's remark about them heading off hither and thither to avail of what the private sector has to offer. That is certainly not the case in the psychiatric sector. They mostly go into the services here and we need them to do so.

I was talking about general nursing.

I understand that was the case, but the Minister of State over-emphasised the extent to which it happens. I emphasise that we need the members of the INO and the PNA, and members of the psychiatric services in SIPTU — I dare not leave the latter group out as Deputy Connolly is here listening carefully to everything I have to say. This Bill will make careers in these essential and important services less attractive and we will all pay a high price for it. I ask the Minister the price he is prepared to pay to press ahead with this Bill without a single amendment. He is confident and bold in his approach, unprepared to accept any of the salient arguments that have been presented. What is the price, the driving force, the justification for this Bill?

I also support amendment No. 2 and I compliment the previous speakers on including the nursing profession, in which I spent some time. I refer to the entrants in the general nursing, psychiatric nursing and teaching professions. When I entered the psychiatric profession one had to serve a total of 30 years, and I started in that service, like many others, at 18 years of age. I would have been entitled to a pension at 48 years of age. However I would not have been entitled to retire until the age of 55. Therefore I would have paid an extra seven years' pension contribution, yet I would not have received any tax break for that. This is one of the difficulties we have created. Nurses and teachers will enter the profession at approximately 21 years of age and they will have 40 years' service accumulated at 60 years of age. They will now have to work for that additional five years for no benefit whatsoever. That is grossly unfair as it represents a sort of double taxation and is a major bone of contention with many people in the service at the moment.

The retirement age in the psychiatric profession has been moved from 55 to 65 years of age. That is a major blow, a 33% increase on the previous length of career. Psychiatric nurses had to work previously for 30 years, now it is 40 years, a phenomenal increase in the amount of service given. Many people enjoy the profession, but it is very stressful and if things go wrong there can be very serious consequences. The relatives of psychiatric patients expect carers who are sharp and with it and who want to work in the profession, not someone who is burned out aged 63. This is no reflection on older people but in general many people are put under huge pressure.

Anybody who applied to enter the profession prior to that announcement would have joined the profession on the expectation that he or she could retire at 55 or 60 years of age. It is common practice in industrial relations that people like that would be red-circled. Those people who are currently in the system should be given the grace to enjoy the same retirement benefits as those who were there before them. If someone now applies for a job like teaching, knowing the consequences, that is a different situation. However, the professionals who are currently working should be red-circled.

Take the example of a teacher who works for 40 years and reaches the age of 61. Can the Minister imagine a teacher of that age taking a PE. class? That is not fair. There are many teachers in the system who would like to retire before 65. Teachers are availing of the current arrangements to take early retirement. It is as if the people who designed this Bill are ignoring the real life situations that currently exist. We will spend time and taxpayers' money training people who will get a few years experience and will be like gold nuggets on the world market. These people will avail of opportunities abroad and they will not come back, especially if they discover that they have to work here until they are 65. It is currently very difficult to get a nurse aged 25 in accident and emergency units in Ireland. How can we expect a 65 year old nurse to work in such physically demanding professions? We need people to be at their mental and physical peak for these professions. We will all be dead and gone when these young people reach the age of 65. They will wonder who came up with the idea that created this mess. It should be sorted out now.

According to actuaries, people who avail of early retirement have a fruitful retirement. Those who work until compulsory retirement have a life expectancy of a further two years. Maybe the Government has a secret plan to work them into an early grave. I ask that some of these issues be revisited.

I would appreciate if I could deal with the amendment in the first instance and then deal with other issues. The amendment moved by Deputy Richard Bruton was to delete the reference to new entrants. That would not alter the Bill in substance but it would remove a reference included to assist in the interpretation of the Bill. The amendment is in order but all it would do is spread confusion among the readership of the Statute Book because the necessary cross-reference to new entrants is stated in section 2, and section 1 clarifies its meaning. For those reasons I do not propose to accept the amendment.

However, I accept that the amendment was moved as a basis for more general discussion on the concept of the new entrant. This concept is at the heart of the legislation. Deputy Burton referred to the concept of invidious discrimination, stating that it would be invidious discrimination hereafter that a particular class of entrant to the public service would have different terms of service from the existing members with regard to pensionable age. That is incorrect. It is not invidious discrimination because it is based on a rational classification which is being adopted on foot of a report on pensions submitted to the Government. The judgment on this question was that because of increased life expectation adjustments had to be made. That is what this legislation is all about. Deputy Ó' Caoláin referred to that context and asked me to clarify it for him. However, I would first like to address what Deputy Richard Bruton outlined to the House. I thank him for the constructive manner in which he acknowledged that there was a problem while raising general reservations.

It is not the purpose of this Bill to implement the entire pensions commission report. Deputy Richard Bruton emphasised that this was a partial implementation of the report, and he is right to some extent. The purpose of this Bill is only to give effect to the age related provisions and recommendations of the report. Discussions are ongoing with the unions on the other recommendations of the pensions commission.

A detailed paper is currently being prepared on each of the recommendations for discussion with the trades union and staff side, with which I agree. It is correct that the Government decided not to implement the commission's recommendations to impose a 1% pension contribution on all staff — the commission recommended a 1% pension contribution on all staff, both serving and new entrants. I presume the recommendation was motivated by the wish to see a more accurate relationship between the funding of these pensions and the amounts paid out. The recommendation was cherry-picked out of existence. It was a political judgment made by the Government. A political judgment was also made that it is in the long-term interest of the country to move in this direction as far as pensionable age is concerned. The Government took account of the views of the public service benchmarking body on the issue of the 1% pension contribution.

Deputy Richard Bruton raised the issue of accrual based pensions. The commission recommended the need for an accrual based approach in accounting for pension costs so that we as legislators, the public generally and those who comment on public affairs have absolute clarity about the actual cost based on an accrual based approach to pensions. The pensions commission set down a brief outline of a system of accounting for public service pensions. It is important to note that the pensions commission stressed it was not in a position to recommend a detailed system. It noted there was a wide range of important issues that needed to be considered in that regard. It was not possible to embark on those issues in the context of the Bill, which seeks to give effect to the recommendation on age-related pensions.

Is the Minister embarking on it somewhere else?

We are, on foot of the pension commission's recommendations.

There were unpalatable things in the legislation.

The most unpalatable element of the legislation is the sacrifice of pensions for those in public positions in the State. It has been used as a sugar coating for the public in regard to the other more toxic provisions of the measure.

Deputy Burton raised the issue of invidious discrimination. To legislate is to discriminate. We are discriminating in the sense that we are making a distinction between those who have entered the public service to date and those who will do so in the future. If we accept the principle of the legislation, it is impossible not to draw a distinction of that type. It is inherent in the principle on which the House has already voted. It appears impossible to embark on a measure such as this, and to plan for the future, without drawing some distinction. In the whole area of pensions and superannuation schemes, distinctions, however invidious they appear to some, are an inevitable corollary of such arrangements. It is impossible not to proceed on that basis.

I was struck when I listened to Deputy Ó Caoláin refer to a disincentive to join the public service. This mentality appears to hark back to an old Ireland, which I thought had gone, where the choice was the pension or the boat. How many people wishing to embark on a career in teaching, nursing or medicine are dominated by the psychological calculation of whether they will retire at 60 or 65 years of age? I accept that was the case but I do not accept it in the country in which we live today, or that it is the motivation of young people embarking on careers. We live in a time of radical change in terms of where young people see themselves going in their career choices. I do not accept that psychological calculation, which is the basis of much of the argument put forward by Deputy Ó Caoláin and other Deputies, is correct. I accept the concerns expressed by Deputies Ó Caoláin and Connolly about professions. Professionals are understandably concerned about themselves, and it is right that they should be concerned about people who enter these professions in the future.

This measure is simply about pensionable age. The judgment the Government made is based on a commission recommendation. The commission considered the issues involved. In the case of psychiatric nursing, for example, there has been a huge change in the way these services are delivered since the original pension arrangements were negotiated and agreed. The great bulk of psychiatric nursing services were carried out in the institutions we all know so well. The shift to community-based services has been dramatic in that context.

In the case of teaching, the commission examined the evidence. While there was a remarkable difference of opinion on the commission between those who have some association with the education sector and those who do not — Senator O'Toole, who has always been very involved in teaching interests, wrote a dissenting opinion in the commission report — a majority on the commission came to a conclusion on that issue. The figures for life expectancy among teachers make interesting reading. The fact remains that the Government had to make a judgment on these matters. I do not accept Deputy Ó Caoláin's argument that a career will be more unattractive as a result of the Bill. The context in which the Bill is drawn up is that of great change in demographic expectations. In the portrait drawn by Deputy Connolly of a 65 year old nurse in a busy accident and emergency unit 40 years hence, the nurse may look like a 45 year old given the changes we are seeing in life expectancy.

While I understand why Members are exorcised about these issues, the Bill before the House is a very limited provision. Deputy Connolly raised an interesting point about prejudice and contributions being lost or in vain. He suggested that additional contributions would be imposed on individuals as a result of this measure. The contributor continues to obtain tax relief on these contributions, therefore, what the Department of Finance takes away with one hand, it gives back some with the other. The retirement lump sum would already have been based on a higher salary and the pension may be based on a higher figure as a result of increments or promotion. The extension in time can enhance rather than reduce the pension.

It is a double taxation on people who have already made contributions for a 40 year pension.

It is an insult to say people will get tax relief on it.

Perhaps I am sensitive on the question of double taxation because the Socialist Party which often occupies the benches near the Deputy is very fond of this argument of double taxation in many wonderful and variegated contexts. The first point to be made about benefits in this context is that we are not yet moving to an accrual based pension system or a 1% compulsory contribution for all existing and new entrants. There are implications in this also. There is a substantial contribution to these pensions by the remaining taxpayers. The point I am making is that there are advantages in the extended period. Advantages and disadvantages may accrue to particular individuals as a result of this. Advantages can accrue notwithstanding the argument for double taxation.

Will the Minister of State explain what is driving him and the Minister, Deputy McCreevy?

What is driving the Minister, Deputy McCreevy, is that this country has changed dramatically. There has been huge economic growth and a huge extension in life expectancy in recent years. The present pension arrangements are not economically sustainable in the long term. The Minister is to be commended for putting in place a system that will protect not just the taxpayers of today or tomorrow, but the taxpayers four decades hence, from possible financial peril, just as he has established the pension reserve fund to ensure there is a sound financial basis for the payment of pensions in the future. The Minister is addressing a long-term issue, as a prudent Minister for Finance should.

A better arrangement could have been reached through consultation and agreement with the group.

I welcome the fact that the Minister is working on a proposal to introduce an accrual-based system in Government accounts. It will result in better saving provision, better provision for the long term and a more realistic attitude to true costs when decisions on recruitment are being made. I look forward to the progress report on it.

There are real problems with people burning out well before they reach 65 years of age, particularly in teaching, nursing and psychiatric nursing. If the Minister for Finance pushes ahead with his proposals, which he undoubtedly will, we must make other changes so that those who have reached the end of their tether can move on to other positions in the public service and retain decent linkages to their pension entitlement in the different posts they occupy over the duration of their service.

The Minister says that other work is being undertaken on this and expects us to accept that without seeing the results of the work. That is why it is so difficult for us to debate this. If proper policies were put in place to encourage people who want to move at 55 into less onerous positions, away from the classroom or the accident and emergency ward, and processes were in place so they could continue to contribute and their pension entitlements would be looked after, we would see this in a more rounded fashion. The Minister is now, however, bringing down the shutters and those on the outside will feel aggrieved. We have not seen the policies that will ameliorate their position in the long term and that is why Deputies are raising these issues.

I accept the logic of the case presented by the Minister regarding invidious discrimination. When pensions are analysed and reforms introduced, there are benefits for some and adverse effects on others. I have experienced this myself in ministerial pensions. People were previously entitled to a pension immediately they left of ministerial office after a period of years but the Administration of which I was member halted that practice and I was a victim of that, although it was the right thing to do. I have no difficulty, therefore, in accepting that there is a real issue to be dealt with regarding pensions in this State and we must make prudent and proper provision for the future in a balanced way.

We must take account of our changing demographic. As a former Minister for Health, I am interested in the comment the Minister of State made about our increasing longevity. I have not seen recent figures but those I last saw indicated that Ireland has a long way to go to catch up with the best in Europe and we should not be boasting about this area. The Minister of State's present job focuses on that.

While any measure to address pensions will have an adverse effect on some, we must have regard to the adverse effects that will not be adequately addressed by the provisions we have laid out. There has been a clear case made and not answered for the teacher who will be expected to teach infants at 65 years of age. In some schools that might be appropriate or the person might not wish to change classes, finding that even more burdensome. It is not realistic, however, to expect people who have worked 40 years to keep plodding on if they do not feel up to it and do not choose to do it. The same case has been made for nurses. The general answer does not address this issues and I want to hear a more convincing answer.

If we are to levy a particular charge or tax on some individual that is designated as a pension contribution and not general taxation, there is a moral, if not a legal, onus on us to accrue some benefit to the individual for that payment. It is not good enough for the Minister to state that we are not charging the full amount because there is a tax concession, the tax concession is involved for everyone who pays the contribution and who will get a benefit from it in real terms. The argument that if they wait longer for it, they might get a few increments so that when they do get it, the base pension will be calculated on a higher basis, makes no sense. A payment that purports to be for a particular designated purpose must give benefit in the terms of the purpose for which it is paid. If pension contributions are to be part of general taxation, it should be stated that is the case.

This issue mirrors the motion we are about to address, where widows' pension contributions are of no benefit. It is not fair that people are required to pay a PRSI contribution but the benefit that should accrue from it is being removed from people retrospectively. That is wrong and it is being replicated here. I cannot see any moral argument that justifies that.

The Minister of State should demonstrate that these three matters have been considered adequately and not that there is not a view in the Department of Finance that there is a general requirement to be met and if there are casualties or even injustices, so be it, we must put up with it. We can tweak the legislation to meet the needs of all sectors in society, particularly of those of demanding and challenging occupations in the public service in education and the health services. We do not need this broad brush to apply the same to all.

I am intrigued by the Minister of State's aside that we are punishing ourselves as well to show that we are good people, that once we flagellate ourselves publicly, the general flagellation will be more palatable. I do not understand the logic of that argument.

The Minister of State is full of surprises. The only thing he has not surprised us about is the substance of the Bill itself. His notion that the 65 year old working in the accident and emergency department in 40 years time will look 45, must mean that he and the Minister for Health and Children intend making Botox available for everyone free of charge under the health system.

It will be Tír na nÓg.

I may not live for another 40 years to see the results of the legislation but I would rather place my bets on real, substantive amendment of the Bill, which the Minister of State had an opportunity to make. All the representative organisations and the spokespersons of the Opposition parties made eminently sensible proposals to him, pointing up the real, harmful elements of the overall propositions of the legislation.

Deputy Richard Bruton correctly referred to the position that will apply when members of the teaching and nursing professions encounter physical or psychological difficulties. What provision is the Government making for new entrants to these stressful occupations? It is offering no reliefs, but only reduced pension entitlement, and is not offering an opportunity for early pensionable qualification on full pension rights. This is what makes the position proposed for new entrants to the teaching and nursing professions — the medical and psychiatric services — and those in training so different from that enjoyed by those currently in service.

Notwithstanding the fact that the Government will press the Bill through numerically on the stroke of seven bells, the legislation merits further consideration. The reality painted by Opposition Deputies for the Minister of State demands that he revisit the proposals because they will give rise to serious problems for people at a later date. This must be acknowledged and addressed, and I urge the Minister of State to do so.

During my last exchange with the Minister of State, I pointed out to him that the various representative organisations had made reasonable proposals for amendment. The Irish National Teachers Organisation, for example, made reasonable proposals with regard to the teaching professions and was prepared to accept change, but the Minister of State was not prepared to embrace them, nor do I believe he properly considered them, given that he has proposed increasing the retirement qualification age for the teaching profession by a full ten years.

In light of the Minister of State's proposal to increase the retirement age for other professions from 60 years to 65 years, it could be argued that he should have raised the retirement age for the teaching profession from 55 years to 60 years. This would have entailed an equal increase of five years in retirement age across the professions, instead of this double whammy of raising it to 65 years for teachers, which is an outrageous proposition.

The Minister of State has lost an opportunity to win some regard and respect, particularly given the current strained relationship between his colleague, the Minister for Education and Science, and the teaching professions. I hope his stance will reflect seriously on him and his colleagues in the coming months.

The dual mandate has been abolished. The purpose of the forthcoming local elections is to elect members to serve responsibly on local authorities, not to afford an opportunity for political play-acting.

Who knows when we will next have a general election?

The precedent is that the Taoiseach is always anxious to serve a full term in office.

Please God, the electorate will not give him a third term.

One never knows, it is a matter for the voters. The basic answer to the points raised by Deputies Howlin and Ó Caoláin is that we must recognise that particular public servants and grades of service, whether teachers, nurses or others performing key frontline activities, can from time to time be under tremendous pressure and strain and special arrangements must be put in place on their behalf. The special arrangements currently in place for the current class of civil servants are expressly dealt with in the legislation and protected, subject to negotiations that take place through the industrial relations machinery in the future.

I am glad that most of the discussion has focused on new entrants and that the precise problem we are addressing has been isolated in this debate. In the case of new entrants, the question is what palliative or suggestion one has when one raises the pensionable age to 65 years. The answer is in the report of the Commission on Public Service Pensions. If Deputies Ó Caoláin and Howlin examined the report, they would see that it canvasses the option of retirement on an earlier basis on an actuarially reduced pension. Equally, it addresses the option of shifting a person's responsibility in the final two years of service to less onerous positions.

Another matter examined by the commission is a new AVC scheme, known as SPEARS, which would make provision for early retirement. Again, the minimum pension age for new entrants will be 65 years but one of the key proposals of the commission, which the Minister has accepted, will be to enable serving staff and new entrants to obtain actuarially reduced benefits at an earlier age if they wish to do so. In such cases, staff would be able to enhance their benefits by using public service pension schemes such as AVC or SPEARS, a new AVC-type scheme recommended by the commission.

Talks on all these matters are ongoing with the staff side and suitable arrangements will be put in place. I have no doubt the precise details of such arrangements will vary in the years ahead as discussions between the relevant staff and officials conclude.

The Minister of State is correct that the amendment is technical and was tabled in an effort to obtain an opportunity to debate the issue. In addition, if passed, it would probably not achieve any of the changes the Opposition seeks so I do not intend to press it to a vote. As we were frustrated on many of our other amendments, this amendment at least gave us an opportunity to debate these issues.

The Minister of State stated that the special arrangements currently in place will continue to operate. These are based on a certification that a person is no longer able to do his or her work, whereas many of the circumstances we have described involve people who are not certifiably incapable of doing the work, but have reached a point at which their contribution to teaching or another profession is no longer sufficiently effective to meet the needs of those they serve and, as a result, they would be better moving on. If the State's position is to be that we must work longer than has traditionally been the case, it must match this by providing that in circumstances where, for example, a teacher in County Donegal aged 55 years is no longer able to teach, the State will seek other opportunities in the public service, which would enable the teacher in question to continue to make pension contributions, while maintaining a sensible linkage with his or her former pension rights.

The Minister is correct that the report of the Commission on Public Service Pensions contains many positive proposals on how to address this issue. We are at a disadvantage, however, in that we do not know how many of its proposals will be adopted and whether the final package will be sensible. I am not always optimistic about the Government's ability to seize opportunities for reform. For example, benchmarking was a marvellous, God-given opportunity to strive towards achieving best practice in the delivery of services and implement an ambitious reform agenda that delivered real change in the public service. We also had €1.2 billion to pay for it, but the opportunity was spurned by the Government. For this reason, I am not convinced when Ministers indicate in the House that they are doing wonderful work in the background, which will resolve many of the issues of concern to Deputies. I would like to see the result before endorsing Government policy in many of these areas.

While the Minister of State is undoubtedly handling this debate well, he is at a severe disadvantage because he does not have available to him the changes that would make this package more convincing to people who want fair play and a public service that works in the long term, deals with people properly in their greying years and ensures they can continue to make a contribution as the country in general grows older in the coming years.

Amendment, by leave, withdrawn.

I move amendment No. 3:

In page 8, between lines 18 and 19, to insert the following:

"2.—The power purportedly conferred on the Minister by section 3 of the Superannuation and Pensions Act 1976 to provide for the cesser of, or otherwise amend, any enactments relating to the superannuation of civil servants shall cease to be exercisable.".

I am minded to think of my colleague, Deputy Michael Higgins, who on occasions like this would normally say, "I move this amendment to be helpful to the Minister". There is an issue in this regard to which I would like to hear a detailed response to ensure that fragility of the superannuation law is rectified and that it is not vulnerable to attack because many people here are dependent on the laws of this land to provide for their pension payments and to provide them with the contentment of an easy retirement. The Superannuation Acts are the governing legislation for most public service pensions. There are many such Acts and volumes of regulations that arise therefrom.

The Superannuation and Pensions Act 1976 was described as an Act to amend or repeal certain provisions of the Superannuation Acts 1834 to 1963. Section 3 of the 1976 Act provides that the Minister may by regulation provide for the cesser of, or otherwise amend, any enactments relating to the superannuation of civil servants. Under the 1976 Act, the Minister can also provide by regulation for the cesser of, or otherwise amend, any provision of any statute or any statutory instrument where it appears to him that provisions are inconsistent with or have become unnecessary or require to be adapted, modified or otherwise amended in consequence of provisions of regulations that he brings in.

The Civil Service Superannuation Regulations 1980 set out the bulk of the amendments purportedly made to primary legislation in the exercise of this power to amend statutes by ministerial order purportedly given in the 1976 Act. Having regard to the recent judgments on the Carrickmines case and other cases dealing with the Aliens Acts, the power to amend primary legislation by order is challengeable We have seen such purported orders not only challenged but overturned as unconstitutional. It vests a power in the Minister to amend the statute by order and even if that were permissible constitutionally, the exercise of the power is not limited by reference to guiding principles or policies set out in the parent Act, which in the Carrickmines case was one of the main considerations by the courts of this land in regard to its constitutionality. Effectively, the Minister, by and large, is able to act as a legislator in the place of this House and the other House with power to overrule, override and amend lawful Acts of the Oireachtas.

The problem with this Bill is not that it repeats the errors in the 1976 Act but it ignores them and sooner or later all these will be tested in the courts — the power of the Minister to make regulations, to make primary legislation by way of orders. For that reason it is frail. I did not have the opportunity to re-read the Committee Stage debate on this section because unfortunately my colleague, Deputy Burton, who was to deal with this Bill, was required to leave the House and asked me to deal with it. However, in normal circumstances had I had the time I would like to have read in detail the Committee Stage debate on this section because it is an extremely important one.

I want to afford the opportunity to the Minister of State to give clear assurances to this House that the difficulties I am pointing up for the Minister are ones that are adequately met and that there is no frailty in regard to the Superannuation Acts, amendments or regulations that have resulted from them and that this matter has been carefully thought out and the advice of the Attorney General has been sought. I would like the Minister of State to give that advice and that clear opinion to the House.

Section 3 of the Superannuation and Pensions Act 1976 is not part of this Bill but it is part of the superannuation code. Some of the regulations which have been adopted under section 3 of the 1976 Act are referred to in a Schedule to this Bill. They are referred to in the Schedule which contains the consequential amendments to pensionable age.

As I stated on Committee Stage, the parliamentary counsel is to be commended on including these with the Bill because it is not always done. In other words, in addition to providing for a main section prescribing the new pensionable age and the abolition of a compulsory retirement age for most categories, there has been an exhaustive examination of the relevant primary legislation and related secondary legislation and the consequential amendments or impact of the general provision of those items of legislation is set out in one of the Schedules to the Bill.

Deputy Howlin posed the question as to whether, in light of recent court decisions, we should act on the assumption that the regulations, the most important of which in this context are the 1980 superannuation regulations, are now unconstitutional, are ultra vires the power of the then Minister to adopt. The Attorney General’s advice is that we have to act on the assumption that these regulations adopted under an Act of the Oireachtas passed since 1937 and by a Minister apparently acting within the scope of his powers are constitutional and there is no court decision impugning or setting aside the validity of these regulations. The regulations confer positive benefits on public servants regarding their superannuation and pension entitlements.

Were we to proceed along the lines suggested by the amendment, although I appreciate it has been tabled for the purpose of eliciting this reply, we would be tacitly accepting that they are ultra vires or unconstitutional in a context where there is still an outstanding appeal, which has relevance to these questions and it is before the Supreme Court. The State has not unequivocally abandoned its rights to confer upon Ministers the power to amend primary legislation by subordinate legislation.

In moving her amendment on Committee Stage, Deputy Burton stated that in the recent Carrickmines case and the case dealing with the aliens legislation, the courts struck down as unconstitutional the purported power to amend legislation by order. This is not strictly accurate. It is important to note that the decision of the Supreme Court is awaited in the second case to which Deputy Burton referred on that occasion. The State will carefully consider the implications of all relevant court rulings on the limitations, if any, on its right to confer upon Ministers the power to amend primary legislation by way of regulation.

The Minister does not intend to rely on section 3 to make further regulations and is not doing so in this Bill. The text of the amendment prevents the Minister from doing so in the future. The Minister does not intend to rely upon section 3 to make further regulations.

The current practice of the parliamentary counsel, as I understand it, in the case of new legislation is to exhaustively set out the principles and policies in the legislation, but a comprehensive review of prior legislation would take a considerable amount of time. In the case of this Bill and the proposed amendment, since Committee Stage the Attorney General has specifically considered the issues raised by the Deputy. The Attorney General is of the view that an examination of this issue would have to take place in a wider context. Such an examination would have to take place in the context of all previous legislation where this form of power was used so that a comprehensive resolution of all the issues involved could be arrived at in a legal sense.

The Bill, while related to superannuation, is limited in its scope and purpose, as clearly set out in the Long Title. I am not appealing to the Ceann Comhairle to rule the amendment out of order but the Long Title of the Bill makes it clear — first and foremost, it is concerned with the compulsory retirement age for certain categories of new entrant into the public service, the increase of pensionable age and the consequential provisions. It does not really relate to the cost of the superannuation legislation and provisions which might be contained within that corpus which may now have a legal cloud over them as a result of recent court decisions. Therefore, I do not propose to accept the amendment.

The Minister of State has accepted the amendment.

I have accepted the spirit of it.

The amendment simply states that the power purported to be given shall cease to be exercisable. The Minister of State has now said it will not be exercised, which amounts to the same thing. He has also accepted the principle which the amendment was designed to highlight and which is the frailty of the corpus of legislation which gives benefit to civil servants who have superannuation rights, which is based on the frail foundation of ministerial order purporting to make legislation that, in general terms, now runs the risk of being unconstitutional.

I could accept the argument made by the Minister of State that because of the scope of the Long Title, this enactment might not be the vehicle for it. However, the response the Minister of State has elicited from the Attorney General since Committee Stage indicates there is a requirement to enact in primary legislation the legislation which is purported to have been made by order of the Minister through statutory instrument. It seems that needs to be done now and the sooner we face up to that and get on with the job, the less likely there will be disruption and annoyance while, for some technical reason, someone takes a challenge to the 1980 regulations and we find that the whole house of cards comes down. There is a moral responsibility on these Houses to respond to the rights of the courts to ensure that we conduct our affairs within the Constitution.

As a Member of the Executive once upon a time, I know that it suits the Executive to have enabling provisions which are inserted into many Acts to simply allow Ministers to do all sorts of things without having recourse to the Houses again. I am glad that practice will cease now.

Will the Minister of State indicate to the House that there will be some urgency in ensuring that the frailty acknowledged by the Attorney General in the Minister of State's reply is addressed?

There is the issue of the outstanding and extant appeal, to which the Attorney General referred. The house of cards has not quite collapsed — it is still extant — although, on the basis of the advice of the Attorney General, it is somewhat shaky at this stage.

It is bad practice anyway.

I have no doubt he is well aware of that and is seeking to address the many issues which he has indicated exist in that context.

Amendment, by leave, withdrawn.

Amendments Nos. 4 to 12, inclusive, are ruled out of order.

I accept the Chairman's ruling on this but the Ceann Comhairle indicated that he would allow a short comment on the ruling.

A short comment is acceptable but I am mindful of the time.

My frustration is that important changes are being made and many Deputies on this side of the House would have liked to test modest changes in the transition arrangements and some of the detail of this, but the rulings have meant that none of those proposals can be tested before our peers in the House. We cannot look for a view on modest changes in what is being proposed. The only proposals that have been allowed to go to the Oireachtas for a vote are those of the Government's choosing. That robs us of the opportunity to have proper debate and the chance to test our proposals by a vote. That applies to the definition of "new entrant", how one treats people who retired before the retirement age and so on.

All five of the amendments I tabled — Nos. 5, 7, 9, 11 and 18 — have been judged out of order as they involve, in the Ceann Comhairle's opinion, a potential charge on the Revenue. As a brief example, I will refer to amendment No. 9, which states:

In page 9, between lines 20 and 21, to insert the following:

"(d) a person who immediately before 1 April 2004 was enrolled in a recognised course of training as a nurse,”.

This is very sane, sensible and relevant to the core of what this Bill is about. The fact that those who are involved in training for the nursing profession, whether for acute hospital services or psychiatric services, will not now be accepted within the service and will be adjudged as new entrants following 1 April is punitive and penal, and will frustrate many people.

The Minister of State asked who, at such an early stage in their career, is thinking ahead to retirement age and pension age. Perhaps it is the case that many more think that way today than in previous years. People who were glad to get a job did not look at the holistic reality of the profession's terms and conditions, but today an educated workforce is very conscious of all the elements and will be very much aware that they are being denied access to the nursing profession, teacher training——

Standing Orders allow only a very brief discussion.

I had five amendments disallowed. I say that in jest, I have made my point. I wish to again record how difficult it is for Opposition Deputies to find a means to impact in an effective way on legislation that is critically focused on financial matters, other than with the devices already employed. It is most frustrating and many people will be greatly annoyed and hurt by this decision.

I understand the frustration in this regard. We use devices to ensure that there is debate on issues, but very often we do not want the amendments we table to be passed, rather it is an avenue to debate issues. When there are significant matters which it is important to debate, the general ruling on a financial charge, which is a broad stroke, should be dealt with as broadly and with as much discernment as possible by the Office of the Ceann Comhairle so that we can address issues about which others are asking and we can have a reasoned response from the Government on these matters.

Amendments Nos. 4 to 12, inclusive, not moved.

I move amendment No. 13:

In page 10, between lines 16 and 17, to insert the following:

"(3) For the purpose of implementing subsection (1), the Minister shall introduce a system of assessment of performance and a policy of facilitating the transfer of persons to alternative responsibilities within the public service where appropriate, in their later working years.”.

This amendment is tabled in the context of the change we are making in retirement age. I am looking for new systems of assessment of people and support for them to move on to other positions in their later years. One of the features of raising the compulsory retirement age, which is proposed in this Bill so that people can work on indefinitely, is that there is a tendency for people to remain in positions of very high responsibility into very late years. There is always the danger that those who will choose to stay on are those one would prefer to leave and vice versa. It is important that we have better systems of assessment of performance in that context.

As it is now 7 p.m. I am required to put the following question in accordance with an order of the Dáil of this day: "That Fourth Stage is hereby completed and the Bill is hereby passed."

Question put.
The Dáil divided: Tá, 67; Níl, 48.

  • Ahern, Dermot.
  • Ahern, Noel.
  • Andrews, Barry.
  • Ardagh, Seán.
  • Aylward, Liam.
  • Brady, Johnny.
  • Brady, Martin.
  • Brennan, Seamus.
  • Callanan, Joe.
  • Callely, Ivor.
  • Carey, Pat.
  • Carty, John.
  • Cassidy, Donie.
  • Collins, Michael.
  • Coughlan, Mary.
  • Cregan, John.
  • Cullen, Martin.
  • Curran, John.
  • Davern, Noel.
  • Dempsey, Noel.
  • Dempsey, Tony.
  • Dennehy, John.
  • Devins, Jimmy.
  • Ellis, John.
  • Finneran, Michael.
  • Fitzpatrick, Dermot.
  • Fleming, Seán.
  • Grealish, Noel.
  • Hanafin, Mary.
  • Haughey, Seán.
  • Hoctor, Máire.
  • Jacob, Joe.
  • Kelleher, Billy.
  • Kelly, Peter.
  • Killeen, Tony.
  • Kirk, Seamus.
  • Lenihan, Brian.
  • Lenihan, Conor.
  • McCreevy, Charlie.
  • McDaid, James.
  • McEllistrim, Thomas.
  • McGuinness, John.
  • Martin, Micheál.
  • Moloney, John.
  • Moynihan, Donal.
  • Moynihan, Michael.
  • Nolan, M. J.
  • Ó Cuív, Éamon.
  • O’Connor, Charlie.
  • O’Dea, Willie.
  • O’Donnell, Liz.
  • O’Donoghue, John.
  • O’Donovan, Denis.
  • O’Keeffe, Batt.
  • O’Keeffe, Ned.
  • O’Malley, Tim.
  • Parlon, Tom.
  • Power, Peter.
  • Power, Seán.
  • Ryan, Eoin.
  • Sexton, Mae.
  • Smith, Brendan.
  • Smith, Michael.
  • Wallace, Dan.
  • Walsh, Joe.
  • Wilkinson, Ollie.
  • Woods, Michael.

Níl

  • Allen, Bernard.
  • Boyle, Dan.
  • Breen, Pat.
  • Broughan, Thomas P.
  • Bruton, Richard.
  • Connolly, Paudge.
  • Costello, Joe.
  • Cowley, Jerry.
  • Crawford, Seymour.
  • Crowe, Seán.
  • Deasy, John.
  • Deenihan, Jimmy.
  • Durkan, Bernard J.
  • Enright, Olwyn.
  • Gilmore, Eamon.
  • Gregory, Tony.
  • Harkin, Marian.
  • Hayes, Tom.
  • Healy, Seamus.
  • Higgins, Joe.
  • Hogan, Phil.
  • Howlin, Brendan.
  • Lynch, Kathleen.
  • McGinley, Dinny.
  • McGrath, Finian.
  • McManus, Liz.
  • Mitchell, Olivia.
  • Morgan, Arthur.
  • Moynihan-Cronin, Breeda.
  • Murphy, Gerard.
  • Naughten, Denis.
  • Neville, Dan.
  • Noonan, Michael.
  • Ó Caoláin, Caoimhghín.
  • O’Dowd, Fergus.
  • O’Sullivan, Jan.
  • Penrose, Willie.
  • Rabbitte, Pat.
  • Ring, Michael.
  • Ryan, Eamon.
  • Ryan, Seán.
  • Sargent, Trevor.
  • Sherlock, Joe.
  • Shortall, Róisín.
  • Stagg, Emmet.
  • Timmins, Billy.
  • Upton, Mary.
  • Wall, Jack.
Tellers: Tá, Deputies Hanafin and Kelleher; Níl, Deputies Durkan and Stagg.
Question declared carried.