Are there time limits for item 1?
Pensions (Amendment) Bill, 1995: Second Stage.
Question proposed: "That the Bill be now read a Second Time."
Yes, there will be a limit of 20 minutes per speaker for Second Stage, if that is agreed.
Is that agreed? Agreed.
The Pensions (Amendment) Bill, 1995, amends certain provisions of the Pensions Act, 1990, and introduces a number of new provisions. The Bill incorporates a number of mainly technical amendments proposed by the Pensions Board on foot of practical problems that arose in the application of the provisions of the Pensions Act.
The Pensions (Amendment) Bill, 1995, was published last December and the plan was to leave the Bill in the public domain for a reasonable time so that full consideration and consultation could take place. The debate and consideration of the Bill was a comprehensive one and a number of amendments were made as the Bill progressed through the Dáil, which I believe further strengthen the provisions in the Pensions Act. I see this Bill, when enacted, as being the completion of a cycle that began in 1990 when the Pensions Act was originally introduced in the Dáil. At the time of introducing the 1990 Pensions Bill the then Minister said that the Bill was the most important legislation concerning occupational pensions to come before the Houses since the foundation of the State. Events in other jurisdictions since that time confirm very much the wisdom and foresight in bringing in the Pensions Act.
The purpose of the Pensions Act, 1990, is to regulate occupational pension schemes, ensure that they are properly administered and that, above all, the pension rights of members and their dependants are and continue to be adequately safeguarded. Both the Pensions Act and the amendments now being proposed have this objective in mind. The protections for members are achieved by setting down minimum standards in key areas and by creating a framework for the regulation and supervision of schemes.
The Act provides for minimum preserved benefits for members who leave a pension scheme, for example, on changing employment, the introduction of a minimum funding standard for certain funded schemes, the mandatory disclosure of information to scheme members along with requirements for periodic actuarial valuations, annual reports and audited accounts, equal treatment for men and women in occupational pension schemes and the establishment of a statutory body called An Bord Pinsean, the Pensions Board, to monitor and supervise the new arrangements.
At present, the board is comprised of a chairperson and 12 ordinary members. This Bill will extend the ordinary membership from 12 to 14 and I will explain the reasons for this when I outline the specific provisions contained in the Bill. The board includes representatives of trade unions, employers, Government and the various professional groups involved with occupational pensions. The board has a chief executive and other staff to manage its affairs. The administrative expenses of the board are financed by fees payable annually by pension schemes.
All pension schemes must register with the Pensions Board. At the end of April 1996 over 60,000 occupational pension schemes were registered with the board, covering almost hall a million people. The board can act on behalf of any member of an occupational pension scheme who is concerned about the failure of those responsible for administering a scheme to adequately protect his or her pension rights.
The Pensions Board has the power to carry out investigations into the operation of pension schemes. It also has the power to prosecute people responsible for contraventions of the rules set out in the Pensions Act or for false or misleading statements in any document required by the Act. The board may, if it considers it necessary, request the High Court to remove the trustees of a scheme. The powers of the board are being expanded and again I will detail these changes when I deal with the specific provisions contained in the various sections of the Bill.
The Pensions Board has proved its effectiveness over the first five years of its existence and I have no doubt that it will play a continuing and important role in ensuring that the occupational pensions of individual members are safeguarded. As Members will be aware, the first board completed its term of office the week after this Bill was published last December. I would like to take this opportunity to thank the board's first chairperson, Mary Broughan, as well as the members and staff of the board for their hard work over the past five years, which has helped to ensure that the provisions of the Act have been successful, and also for assisting the Minister for Social Welfare in formulating the provisions of this Bill.
The provisions of the Pensions Act, 1990, were in line with best international practice and, indeed, ahead of the practice in many other countries. That Act placed Ireland to the forefront internationally in relation to the regulation of occupational pension schemes.
The pensions industry is of major importance to the economy. The total asset value of pension funds is estimated to be in the region of £16 billion, equivalent to almost 50 per cent of GNP. When you consider the magnitude of this figure you realise the economic and social significance of these funds, the importance of them being fully safeguarded and the contribution to investment that they make.
In recent months my colleague the Minister for Finance has had discussions on this subject with the Irish Association of Pension Funds and the Irish Association of Investment Managers. Arising from these discussions the three parties have agreed that a new study should be undertaken on the scope for increasing pension fund investment in the economy. The aim of the study is to identify commercially viable investment opportunities in the domestic economy and the potential for increasing the participation of Irish pension funds in financing such opportunities.
The study is also examining whether there are gaps in capital markets in terms of meeting economic needs for long-term finance and, if so, what mechanisms or instruments can be developed to iron out such imbalances. In carrying out the study the consultants, of course, have full regard to the commercial and fiduciary responsibilities of pension fund trustees. This study is, I understand, at an advanced stage. The final report of the National Pension Board. "Developing the National Pension System", among other things reported on the aging of the Irish population and the problems that will present.
On a number of occasions in the recent past the Minister for Social Welfare has drawn attention to demographic patterns which indicate a considerable increase in the proportion of elderly people in the population over the first half of the next century. This will have a significant impact on the future costs of social welfare pensions, which are set to increase by 100 per cent by the year 2035. At the same time, the ratio of persons in the economically active age group to those over age 65 is projected to fall. This would result, in the absence of any policy change, in the increasing burden of the cost of pensions falling on future generations of PRSI contributors and taxpayers.
These are important factors in any consideration of the development of future pension arrangements and raise serious questions about the capacity of the present financing arrangements to meet these emerging costs. The pensions industry is also placing considerable emphasis on this issue at present. One aspect which needs to be examined further in this regard is the effect of real long-term growth in the economy. If this is maintained, it should increase the resources available to pay for pensions in the future, although there will be many competing claims for any resources freed up as a result of this growth. The Minister hopes to bring forward proposals based on the recommendations of the NPB report in next year's budget. The question, for example, of the introduction of pro rata pensions falls to be considered in the context of this report and, of course, taking account of the overall future funding of pensions.
A major survey of occupational pension schemes, which was recommended by the National Pensions Board, has been commissioned jointly by the Department of Social Welfare and the Pensions Board and a report will be available later this year. The last major survey was carried out in 1985 and the results of this new survey will give essential up to date information on occupational cover, which will be of considerable assistance when proposals in relation to pensions are being formulated.
The Minister has stated frequently in recent times that demands to abolish or significantly reduce contributions to the social insurance fund are short-sighted, given the demands which are currently being placed on it and which will grow in the years ahead. In this regard we must preserve the principle of solidarity embodied in the social insurance system if we are to guarantee pensions needed in the future due to the aging of the population. It should be stressed that there is no danger to anyone's current pension entitlement. However, as I pointed out earlier, demographic and labour market changes are issues which we cannot afford to ignore. Provided that over the next few years we face up to the needs which we know will arise because of these changes, we can plan to deal with them in an orderly and effective way.
A subcommittee of the Pensions Board was set up and undertook a major review of the Pensions Act with a view to recommending the necessary changes to complete the cycle that began with the introduction of the Pensions Act in 1990. Both the Department and the Pensions Board were well aware that teething problems were likely to arise with the Act. However, after a period of five years it is now considered desirable, if not essential, that a period of certainty should ensue. Accordingly, this Bill results from a comprehensive review of the legislation with a view to making the necessary amendments so that no further amendments will be necessary in the short term. As was indicated in the Dáil, this may not be entirely possible in the area of equal treatment where clarification of a number of European Court cases and directives on equal treatment as regards pensions are being considered and may necessitate further changes in our pensions legislation. These matters will be considered in conjunction with the Pensions Board in due course and, if necessary, amendments will be made through a future Pensions (Amendment) Bill.
Overall this Bill reinforces the safeguards already in place in relation to occupational pensions and it is my hope and belief that it will strengthen the certainty that when individual members of schemes come to retirement age their pension will be waiting safely for them to ensure their continued prosperity in retirement.
I will now briefly go through the provisions in each section of the Bill. Section 1 simply defines the Pensions Act, 1990, as being the Principal Act. Section 2 provides for certain definitions to be amended or inserted. Section 3 corrects an anomaly that exists by expanding the grounds for the defence of a person being prosecuted for an offence under the Pensions Act or its regulations. This will particularly benefit trustees of schemes provided, of course, they act in an honest and honourable fashion. This section also extends to two years, from the date of an offence, the time within which a summary prosecution can be brought.
Section 4 is a new section inserted on Report Stage in the Dáil. This provides for the Minister for Social Welfare, with the consent of the Minister for Equality and Law Reform, to make regulations specifying guidelines for the purposes of section 12 of the Family Law Act, 1995, which deals with pension adjustment orders in cases of judicial separation. It sets out in some detail the matters the Minister must take into account in making these regulations.
Section 5 extends the power of the Pensions Board to enable it to provide guidelines or guidance notes on the operation of the Pensions Act generally as, at present, its powers only allow them to issue guidelines on the duties and responsibilities of trustees. An amendment made on Committee Stage in the Dáil also gives the board power to issue guidelines or guidance notes on the provisions of the Family Law Act, 1995, relating to pension schemes as defined in that Act.
Section 6 strengthens the powers of the Pensions Board in carrying out investigations. It particularly authorises that a person other than an employee of the board can carry out such an investigation. This person would, of course, have to be authorised by the board to act on its behalf.
Section 7 extends confidentiality and prohibition on disclosing information to those persons serving on committees of the Pensions Board; they had been inadvertently omitted from these provisions. Section 8 clarifies procedures in relation to the determination of disputes by the Pensions Board. Oral hearing regulations will be brought forward when this Bill is enacted.
Sections 9 and 10 are technical amendments. Section 9 clarifies the situation in relation to calculating preserved benefits in specific instances. Section 10 deals with an anomaly in relation to a situation that could arise, where a person could receive a refund of his or her contributions without terminating his or her employment and then qualify for a preserved benefit as well if they subsequently left employment.
Section 11 was inserted on Report Stage in the Dáil and provides added clarity in relation to revaluation of a preserved benefit in the light of the amendments being proposed to the Second Schedule — section 41 refers.
Section 12 is a technical amendment which clarifies the position of a death benefit in the calculation of a transfer payment where a preserved benefit is involved. It also clarifies certain matters in relation to the transfer of preserved benefits.
Section 13 allows that forfeiture of a preserved benefit may occur, at the discretion of the trustees, where a member assigns or charges his preserved benefit and where in the circumstances it would be to the benefit and advantage of the member to have this forfeiture of his preserved benefit take place.
Section 14 is a technical amendment which allows regulations to specify how a preserved benefit should be calculated where, within a particular scheme, a member's benefits are calculated partially on a defined benefit basis and partially on a defined contribution basis.
Section 15 allows for the payment of a preserved benefit later than normal pensionable age, but only where the member requests it to happen. Section 16 gives the Pensions Board an option, in certain circumstances, to modify the provisions in relation to the production and submission of an actuarial funding certificate. This would be where it would be in the best interests of the members of the scheme to do so.
Section 17 clarifies the priorities in relation to the winding up of a scheme. Section 18 defines the employer for the purposes of submitting a funding protown posal under section 49 of the Act, including circumstances where a number of employers may be involved. In addition, it provides that such a funding certificate should also be signed by the trustees of the scheme as they may have a direct responsibility over some matters contained in the funding proposal. At present they are not obliged to do so.
Section 19 provides that where the Pensions Board, under section 50, directs trustees to reduce the benefits in a scheme, where the trustees have failed to submit an actuarial funding certificate or a funding proposal, the trustees must take the necessary measures to carry out the direction. It also provides that such a direction made by the board shall override any other provisions of the Act.
Section 20 provides that the trustees of a scheme must disclose information on that scheme to the Pensions Board. At present, the board is not listed among the parties to which the trustees must disclose information. This provision was slightly amended in the Dáil to provide that such information need only be sent to the board where the board requests it in writing. Otherwise there would be a danger that the board would be deluged with annual reports and information. This will allow the board to be selective in asking for information, both in specific schemes and on a random basis, to ensure compliance with the provisions of the Act.
Section 21 allows that an annual report of a scheme can be prepared for a period of up to 23 months. However, this may only be done in certain clearly defined circumstances and then only with the approval of the Pensions Board. Section 22 clarifies some matters in relation to audited accounts and actuarial valuations.
Section 23 allows trustees to meet the costs of appropriate trustee training from the resources of the scheme. This was discussed in some detail in the Dáil and, in response to the genuine concerns of some Deputies, the original section was amended by the addition of the word "reasonable" before the words "costs and expenses", which would deal with the possibility that a trustee might think that it was suitable that trustee training take place in Barbados or such other exotic location.
Section 24 is a new section inserted at Committee Stage in the Dáil and is a technical amendment in relation to certain schemes which are registered as perpetual funds. Section 61 of the Pensions Act provides that certain provisions of the Perpetual Funds (Registration) Act, 1933, shall not apply to pension schemes. However, some schemes have provisions in their rules which have the same effect as those contained in the 1933 Act — particularly section 7, which deals with retrospective amendments. This insertion into section 61 of the 1990 Act seeks to put the validity of any amendments to the rules of such schemes beyond any doubt.
Section 25 deals with the rule against perpetuities which requires that trusts cannot continue beyond the lives in being on the commencement of the trust plus a further period of 21 years. It is considered reasonable that this should not apply to trusts that govern pension schemes. The employer and the trustees will often intend that the pension scheme should continue indefinitely or, at least, while the employer remains in business. This section will allow this to happen. Again, a further technical change was made in the Dáil to this section which was simply a clarification without changing the intent or meaning of the original provision.
Section 26 clarifies the conditions under which the board may seek, from the High Court, the removal and replacement of trustees. Section 27 allows the board to apply to the High Court for an order suspending a trustee or trustees. It sets out what the order may contain, including the appointment of a replacement trustee and the transferring of the assets into the names of the new trustees. It also sets out penalties for a person who might continue to act as a trustee while he or she is suspended.
Section 28 streamlines the procedures for the board to appoint trustees where there are none or the existing trustees cannot be located. Section 29 makes minor amendments in definitions dealing with equal treatment. This limits jurisdiction to employment "within the State" as otherwise it could be implied that the Pensions Act has powers outside the State which is not the case. Section 30 was introduced on Committee Stage in the Dáil and inserts the word "objectively" before "justifiable" to bring the wording into line with European Court judgments in this area.
Section 31 clarifies the provisions which deal with differences in pension rules prior to the date of the European Court of Justice judgment of 17 May 1990 in the Barber case. This was again amended on Committee Stage in the Dáil to deal with a possible anomaly that could arise in relation to schemes which changed their rules to provide for equality between 17 May 1990 — the date of the Barber judgment — and the 1 January 1993, when Part VII of the Pensions Act which deals with equal treatment was brought into effect.
Sections 32 to 36 provide for equal treatment to apply to collective agreements, regulation orders, registered employment agreements and contracts of employment. They also provide for some consequential amendments. Some of the sections in question were amended in the Dáil to deal with the possible anomaly outlined in relation to section 31.
Section 37 provides that an employee who liaises with the Pensions Board is protected against unfair dismissal provided that he or she acted in good faith. Section 38 makes it mandatory for certain persons to make a written report to the Pensions Board of any material misappropriation or fraudulent conversion of the resources of a scheme where they have reasonable cause to believe that this is happening. The persons covered by the section are the auditor, actuary or trustee of the scheme, any insurance intermediary or investment business firm which has advised on the scheme or has received any payment in relation to any investment on behalf of the scheme, a person who has prepared an annual report of the scheme under section 55 of the Pensions Act and a person who carries out any of the duties of the trustees of the scheme under section 59. This section provides protection to persons who make such reports. It covers not only mandatory reports but also voluntary reports made in good faith to the Pensions Board. It also makes it an offence for a person knowingly to make a false report to the board. There is also provision that any report published in relation to this section will be privileged.
The wording in the Bill as published caused certain concern, particularly the use of the term "is being contemplated". After considerable discussion and consultation with the Office of the Attorney General, the Pensions Board and the pensions industry, the section was amended on Committee Stage in the Dáil to replace the words "is being contemplated" with "is to be attempted". Other amendments to clarify definitions and to clarify the matter of privilege in relation to such reporting were introduced. I am now satisfied this section will provide another step forward in protecting the pensions of the individual members of occupational pension schemes.
Section 39 deals with applications to the High Court by the Pensions Board to seek orders to have an employer pay arrears of contributions and for the restoration of resources of the scheme where they had been wrongfully paid or transferred to any person and such payment or transfer is likely to jeopardise the rights and interests of the members. The court may also make an order directing trustees to dispose of an investment where it is satisfied that the retention of the asset could again jeopardise the rights and interests of the members. The section deals with injunctions where a person could be prohibited from any misuse or misappropriation of any of the resources of the scheme and also provides that, following an application by the board, the court may grant an injunction prohibiting an investment or freezing the scheme assets pending the outcome of an investigation by the board.
Section 40 clarifies the situation in the event of the chairperson of the board having to be replaced, for example, if he or she died or resigned. This section also provides for the expansion of the membership of the board to include two new ordinary members. This will increase the membership from 12 to 14 ordinary members. One of the new members will be nominated by the Irish Congress of Trade Unions and one by the Irish Business and Employers Confederation and each has to be a trustee of a pension scheme.
Trustees are the main custodians of pension schemes. This new provision will ensure trustee representation on the board, which is considered to be desirable. Up to the present, there has been no one specifically representing the concerns of trustees. This provision will add a further dimension to the board and will give it a wider representation. This is especially important since the advent of statutory member trusteeship.
During the passage of the Bill in the Dáil the Opposition spokesperson put forward an amendment to provide for three new members of the board — one from the investment management industry, one a pensioner trustee and one from the Consumer's Association of Ireland. As the Minister of State at the Department of Social Welfare, Deputy Durkan, indicated during that debate, it is considered that the composition of the present board, particularly when the two new trustee members are added after the enactment of this Bill, will ensure that the interests of all areas of the member and the industry are adequately represented by the composition of the present board.
Section 41 is a technical amendment which provides for the elimination of anomalies in relation to the calculation and revaluation of preserved benefits under the Second Schedule to the Pensions Act. On Report Stage in the Dáil this was extended to deal with an anomaly that came to light in relation to the revaluation of preserved benefit. The principle underlying section 33(2) of the Pensions Act, which deals with this area, is that there should be revaluation of preserved benefit where there is a period of at least one year between the date of leaving service and the date of commencement of pension. The anomaly, which this amendment seeks to correct, is that because revaluation is calculated by reference to complete calendar years, it is possible that a period of more than 12 months may elapse between the date of leaving service and the date of commencement of pension but the member may not qualify for revaluation because the period does not include a calendar year. We now seek to ensure that the maximum period is now included for revaluation purposes by amending the calculation formula.
Section 42 deals with practical difficulties in relation to actuarial funding certificates under the Third Schedule to the Pensions Act. Section 43 increases summary fines from £1,000 to £1,500. Section 44 provides for fines where a person has been convicted of an offence and continues to contravene the provision concerned. Sections 45 and 46 deal with the saving of instruments and give the short title of the Bill.
There are a number of other issues where the possibility of future legislation may arise for consideration. In this regard a few issues that spring to mind include the possibility of a compensation fund; the need for a pensions ombudsman; the extension of preservation to pre-1991 service; the accrued rights of people who remain in the scheme as opposed to those who leave the scheme; the encouragement of the extension of pension coverage to part-time and atypical workers and the treatment of surpluses. In the Dáil Deputy Joe Walsh raised the issue of surpluses and the Pensions Board will be asked to report to the Minister on it.
These are just a few of the many issues that face the new Pensions Board and which it will consider in detail over the next five years. The Minister looks forward to their deliberations, reports and recommendations during that period. This Bill seeks to update the legislative provisions in place and to introduce some new provisions to ensure the continued safeguarding of individuals' entitlements in relation to their occupational pension schemes. I commend the Bill to the House.
The change in employment practices over the last 15 years has made it necessary to have proper legislation in place to guarantee the rights of people who have paid into pensions and to make the arrangements more flexible for those who change employment frequently. Up until ten or 15 years ago people had jobs for life; they paid into pension funds and at the end of their employment a pension was available to them. However, with changing work practices, people retiring earlier and people taking more than one employment during their working life, it is important to have legislation to safeguard people who have paid into pensions.
The number of people who will be dependent on State and occupational pensions in the future is alarming. A recent statement from the Minister highlighted this issue which is of concern to many. Old people do not demand much — they want to live out their final years in decency and dignity. It is imperative that we ensure legislation is in place and the resources are available to ensure pensions will be provided.
Demographic changes will have to be taken into account. It must be realised that in years to come a huge burden will be placed on the State. Statistics from the Central Statistics Office indicate that by the year 2035 the number of people dependent on State pensions will have increased by 100 per cent. We have to plan for that eventuality and to encourage people to take out occupational pensions.
There seems to be a lack of urgency among young people to get involved with occupational pensions. They see the age of 65 as being very far away and they are not inclined to avail of pension schemes. The message should go out that occupational pensions are important and people should take them up at an early age. There are tax incentives but the philosophy of youth does not encourage long-term planning. Social and employment pressures incline young people to "short termism". An advertising campaign might be run to encourage young people, and perhaps it should be made more tax friendly, to become involved in occupational pensions at an early age.
The demographic changes in the future will make it difficult for the State to cater for everybody. In the next century almost a quarter of the population will be over 60 years of age and there will be a reduction in the ratio of active young people to old people from 5:1 to 3:1. This puts a great burden on those generating the revenue to pay for pensions. What provisions are there to ensure that pensions are not in jeopardy? What will happen in 30 years? This issue should be discussed in a calm manner because when it is pointed out that there will be great pressure on revenue to provide pensions it can send out panic signals.
The Minister of State indicated that the Pensions Board would be setting up a committee to report on the investment of pension funds in the State. It is an investment opportunity that has not been harnessed. There are about £16 billion in pension fund assets which could be used to provide capital and equity for investment and job creation. I understand the opportunities for guaranteed investments are limited given the size of the population and the economy. However, this matter should be researched and encouraged.
The Dáil amendments with regard to the membership of the board were made with a view to encouraging the investment of pension fund assets in this country to create jobs or purchase stakes in semi-State bodies which may be sold. Irish pensions funds have been invested in other countries. Investment by Irish pensions funds in the Irish economy must be encouraged.
What changes or advances will this Bill make for women and their pension arrangements? Where the breadwinner in a family is a man and he is paying into a pension, what will be the position of the woman in the event of a divorce? There may be anomalies which will leave women vulnerable. Women do not always have pensions and if they become separated they may find themselves dependent on a State pension with a delay before they can avail of it.
There exist specific problems with regard to social welfare pensions for the self-employed, particularly those who have made less than ten years' PRSI contributions; they may not qualify for contributory old age pensions. This anomaly has not been addressed satisfactorily. Self-employed people have been encouraged to pay PRSI contributions and it now appears that many of them will not qualify for a pension because they have paid less than ten years' contributions. This difficulty sends out the wrong signal that those who pay for pensions do not necessarily receive the benefits.
I hope the Minister will address this matter in the near future. We have raised it on many occasions. We understand how the problem arose but it must be resolved. I ask the Minister to respond to the lack of understanding on the part of the Department for self-employed people who paid their contributions and wish to receive a contributory pension. That matter should be resolved immediately.
The Pensions Board and this legislation have important parts to play. The Pensions Act, 1990, was probably revolutionary legislation in its time. It consolidated the pensions area and provisions for old age. However, many people did not even realise it was discussed in the Dáil and the Seanad in 1990. Today we are again discussing legislation which will affect a large number of people, but for young people particularly pensions seem to be in the distance.
We should ensure — be it through financial incentives or advertising campaigns — that young people realise that at some stage in the future they will be dependent on a pension. The State pensions are not adequate and we need other pensions to ensure we can live with dignity and security in our later days. This is an issue of which I am conscious, probably because of my age and the fact that I speak to many working people who are not looking to the long term or using the disposable income available to them to invest in pensions. They are probably availing of more social activities and not looking at concrete long-term planning. This issue should be discussed and highlighted. The Central Statistics Office and the Pensions Board are probably aware that in time these are the people who will be dependent on State pensions.
The Minister pointed out that this is basically a technical Bill. It gives the Pensions Board more powers to investigate pension trust funds and that must be welcome. We need only look across the water at the Maxwell case which highlights the underlying fears that pensions may be evaporated or the funding diverted to some other activity so that when a person retires, their pension is not available. This legislation ensures that the board has the power to investigate any wrongdoing or misappropriation of funds and in that regard it is welcome.
The Bill amends important legislation which was passed in 1990 and it can only be for the better. However, the Minister and the Department of Social Welfare will have to send out the right vibes to people on old age pensions because they fear about a lack of funding to guarantee State pensions. It is important that we get the message across that their pensions are safe and that people further down the age profile should avail of occupational pensions to avoid putting pressure on the State in years to come.
I will table amendments on Committee Stage for the reasons outlined by my colleague in the Dáil and by myself today. The legislation is timely and welcome. The powers available to the board will ensure that pensions and the pension funds will be there for people when they require them in their later years.
I welcome this measure. The Minister covered the various aspects of this legislation in his comprehensive introduction. He also summarised the main provisions of the Pensions Act, 1990. It is a useful indication of how legislation and the Oireachtas work that, having passed the Pensions Act in 1990 and reviewed its operation — it was substantial and relatively new legislation at the time — we are back here today dealing with an amending Bill which sets out to rectify shortcomings which emerged in the operation of the 1990 legislation. That is a welcome development. It is an indication that the Minister, his Department and the Oireachtas are keeping a close eye on how legislation affects the livelihood, welfare and future of our citizens; that of course is our primary obligation.
Both the Minister and Senator Kelleher indicated this is a technical Bill and it is more suited to Committee Stage debate. I understand Senator Kelleher will table a number of amendments on Committee Stage. More than three-quarters of the 46 sections are amendments to the Principal Act and less than one-quarter represent a new input. We are improving what is already there. I have no difficulty with the legislation as presented and I am happy to support it.
There is no doubt that if amendments are tabled and discussed in detail, verification and information will be required but we can deal with that when we come to it. I compliment the Minister and his Department on the time allowed to the public and ourselves to assess the contents of the legislation. It is almost six months since this first emerged and that is a reasonable period to provide the public and the legislators with the opportunity to consider its implications. Despite the fact that the 1990 Act required this measure to put it right, that Act and events which flowed from it have shown quite clearly that it was valuable legislation which safeguarded the regulation and supervision of pension schemes.
The Pensions Board includes representatives of various interests, including the unions, the employers, the Government and the professional bodies. The Minister is extending the number on the board from 12 to 14 and the nominees for these two additional places are to come from ICTU and IBEC. I have no problem with that; it is a welcome development. The Minister said that many of the amendments in this legislation were advanced and recommended by the Pensions Board itself. There is no doubt it was done in the light of its experience as it operated the original legislation.
Amendments were accepted by the Dáil. I wish to repeat something I said here two weeks ago. I welcome what I perceive as a new openness on the part of Ministers to accept changes and amendments to legislation. I recall times when Ministers produced legislation as if it was cast in tablets of stone. There was no inclination, willingness or desire to accept amendments, however well argued or however sound the reasoning behind them. I am glad that day has passed and that Ministers are objective, open minded and fair enough in their approach to accept a constructive and reasoned argument when it is made. I compliment the Minister and his colleagues. If amendments are tabled or if difficulties are found with any aspect of the legislation. I am sure the Minister will be willing to consider reasonable, rational and objective arguments.
The Minister said there are about 60,000 occupational pension schemes registered with the Pensions Board and that they cover over 500,00 million people. This is an enormous operation which, given its size, needs to be properly supervised, regulated and controlled. The powers this legislation will give to the board are necessary and desirable. The Minister mentioned the size of an industry — I use that word in the broadest sense — which is valued at £16 billion, equivalent to 50 per cent of the gross national product, and its value to the economy.
I endorse Senator Kelleher's comment about moneys tied up in pension funds and their value if invested in the economy. We should ensure the greatest share of these funds finds a home in our economy. The value of that investment in terms of the creation of jobs and prosperity would be enormous. I share Senator Kelleher's sentiments that a sufficient proportion of pension funds have not been invested in our economy to date. I support his call to increase that level using whatever methods are available.
Another point alluded to by the Minister and Senator Kelleher was the age structure of our population and the problems and effects likely to arise from that in the early part of the next century. This is a matter which has been receiving attention recently. It is important to plan to avoid difficulties in the future. The Minister spoke about future issues and he was again looking into the vista before us and recognising the need to seriously address the situation. The Bill ensures the security of those already in pension schemes. There is no greater fear for a person approaching retirement age than to doubt that their full or their planned pension may not be available.
As I said earlier, this is a technical Committee Stage Bill and I do not want to go into detail on the sections. However, some sections are welcome and deserve to be highlighted. I particularly welcome section 20 which relates to the obligation to disclose information. Under the legislation trustees will have to disclose information to the Pensions Board; this is an essential obligation which was omitted until now. Sections 26, 27 and 28 strengthen the control of the Pensions Board in relation to trustees in terms of their activities, their control and their removal and replacement.
The only other section to which I want to refer is section 38 which deals with the mandatory reporting of activities of trustees or pension funds which could damage the investors who depend on these funds to provide them with security in their old age. Section 38 identifies the person or persons on whom obligations and a legal requirement will be placed to report activities which could damage the operation of the funds.
The Minister referred to future issues which must be addressed. I welcome this Bill and I know the Minister will be willing to look at aspects of it if a rational argument is made. By and large, I am satisfied with this legislation as a measure which will improve on an Act that has proved satisfactory and which will provide a safeguard to those involved in occupational pension schemes. I support the Bill which I hope will have a rapid passage through the House.
By and large, I welcome the Bill which is a follow on from the Pensions Act, 1990. It contains many sections which are mainly technical and will meet the requirements considered necessary at this time. I would like to highlight the value of the Pensions Act, 1990, which was forward looking. It brought together many aspects of pension funds and their regulation. This legislation is brings matters up to date, which is appropriate and necessary. I have no doubt another Bill will be introduced in the future. Due to EU regulations and directives, the situation as regards pensions keeps changing.
The pension business is a major financial cog in the economy. The Minister mentioned the figure of £16 billion, which is a massive amount of money, and it is important Governments ensure we use it to the benefit of the economy. I compliment the Minister on the initiative taken at a recent meeting where the overall picture as regards pension funds was discussed. Opportunities to tap into that massive resource were discussed and how it could be used to the benefit of the nation and the people. The Minister will have everyone's support because we have a sound economy and it is important to avail of opportunities to get pension funds to invest here as this will have a knock on effect.
This Bill will further regulate pension funds. Apart from the economic aspect — this has been mentioned already — we must also look at our responsibilities as a nation to our ageing population in the next few decades. Now is the time for us to identify ways of dealing with that matter and to put in place the necessary structures and investment so we can meet that obligation when it arises.
The Minister should consider having further representation from other bodies on the Pension Board. The Minister has agreed to extend the membership of the board from ten to 12 people by adding a representative from IBEC and the Irish Congress of Trade Unions. A number of other bodies should also be considered for a position on the board. The Consumers Association of Ireland and the pensioners should be represented. Would it not also be appropriate to have a representative from the self-employed groups? This would cover groups like the Vintners' Federation of Ireland, the Law Society, the farming organisations, etc. Their points of view should be put forward and that representative could have a say on this matter. While technical backup is always important, we should have the views of these groups on the board.
The Bill should also have considered making a provision in law for a pensions ombudsman. We have ombudsmen who deal with different issues, disputes and evaluations in other areas and it would be appropriate and timely to appoint a pensions ombudsman. I ask the Minister to consider my points. A pensions ombudsman would give great balance and public confidence to deal with situations as they arose. Ombudsmen have proved successful in other areas and providing for one in this Bill would be a good move.
Two pension schemes recently brought on stream were bum deals for some of our people. One was the inclusion of the self-employed to the PRSI scheme in 1988. Some 30,000 people who paid into that fund since 1988 will not qualify for a contributory State pension and they will only get 53 per cent of their contributions back. The State will hold onto the other 47 per cent in lieu of the provision it made for a survivors' pension, to which these people are entitled after paying three years' PRSI. All these self-employed people have paid PRSI contributions since 1 April 1988 but any one of them over 56 years of age on or after that date will not qualify for a contributory State pension. Surely this is not justice and fair play. I ask the Minister to convey back to the Minister and the Department of Social Welfare the grave concern and annoyance among the public on this matter.
Little change would be necessary to make these people qualify for the scheme. One way would be to allow them to continue making their contributions to reach the ten year requirement — we are only talking about 30,000 people and it would not arise again — and they would then qualify for a contributory State pension. We could also allow them to make up the ten years at 66 years of age. These are two simple solutions to the problem. Surely we could make that small accommodation to a person who has paid PRSI contributions towards his pension since 1988. If we cannot do this, then they have been sold a bum deal.
I also referred to people who were offered the farm retirement package — this is also a bum deal. Under its terms, a farmer would qualify for a ten year pension if he handed his farm over to his son or daughter. However, what was not explained was that if the spouse of that person reached pension age, they would have to apply for the non-contributory old age pension and their EU pension would be discarded. No other such situation applies in this country. A person or his spouse could be getting £800 per month from the farm retirement scheme but that would be totally excluded when they are evaluated for a non-contributory old age pension. Of course, they would be granted a full pension for themselves, their spouse and maybe a dependent child. However, the next step would be to take this payment out of the farm retirement scheme. This was not explained to the public when it came through the back door but it was implemented by the EU through the Department of Social Welfare.
Under the farm retirement scheme, the payments would continue if the farmer or his spouse died. However, what happens if the person receiving the old age pension dies and there is no record of them getting the EU payment? The only explanation I received from the Department of Social Welfare was that the young person who got the farm must apply himself for the farm retirement scheme package. That seems to be an extraordinary development following a EU scheme that was explained, promoted and sold with the full backing of the State in every little hall and community centre around the country. Now we have a mass of bureaucracy to interfere with the scheme. Who ever heard of somebody excluding a payment of £800 per month when you were compelled to apply for a non-contributory old age pension? They did not want to apply. Surely, that is another bum deal as far as the Irish people are concerned.
I am not blaming the Minister for what has happened on this because he is not responsible; perhaps, there is no Minister responsible. The bureaucracy of Europe and our Department of Social Welfare has allowed those situations to develop. The proper and thorough investigations that should take place when EU directives and EU funded schemes are brought in do not take place. I have no doubt that we will back here again in a couple of years with the same type of legislation to try to meet new and developing situations. The last two schemes have not been in the best interest of the Irish people. They are shown not to be what they were played up to be and what they were told they would be at that time. I would ask the Minister of State to comment on what I have said.
I welcome the legislation. It is necessary and I am glad the Minister has brought it forward. By and large, it is amending legislation of a technical nature to update, regularise and give more authority to pension boards. There are a couple of good provisions, particularly the one where the board can hire outside assistance to come in and investigate matters. It is important that they have that authority and that they can bring the best technical advice and assistance to deal with any matter they consider necessary.
I welcome the Bill and I look forward to further debate on Committee and Report Stages. Perhaps accommodation can be made for some of the points that I made.
I welcome the Minister's preparation of the Pensions (Amendment) Bill, 1995. This is a technical Bill and unlikely to be of great interest to the ordinary person in the street or to many Members of the Oireachtas. However, we as legislators have a particular responsibility when we are dealing with specialised legislation. We cannot allow the content of these Bills to be in the exclusive control of specialists. The Members of the House must make the final decisions on all aspects of these Bills and must therefore attend to business, especially when the topics are relatively unfamiliar and specialised.
The matter of pension regulation and the control and administration of pension systems is important. We only have to see what happened in Britain with the unfortunate Maxwell pensioners. This matter is still sub judice in England and one should not say much about it. Those people who were persuaded to change from public to private pensions allow us to see some of the abuses to which pension schemes are subject. Those who talk of the virtues of free unregulated markets should thread warily when they are dealing with pension schemes. A lot of people could potentially be affected by what we do with this legislation. A survey conducted in Ireland ten years ago found that two-thirds of all employees were members of an occupational pension scheme at their workplace and relied in many cases on such pensions to top up their State entitlements when they retired. About one-third of self-employed have made private pension provision, thus we are dealing with a large and growing market here.
The Central Statistics Office predicts that the proportion of people aged 65 and over will only increase by a small percentage, between 1 and 2 per cent, in the next 15 years, but in the following 15 years the numbers over 65 will increase significantly, by between 5 and 6 per cent per year. Thus, it is essential that our pension regulation system be proven and as clean as a whistle with the growth of the older population.
Furthermore, there will be an increasing trend towards early retirement, and some provisions in the Bill deal with specific problems in this area. Appropriate pension regulation is also important in dealing with this.
I also welcome the application of the principle of equal treatment for men and women in this Bill. It may seem rather quaint in 1996 that equal treatment is not required in the application of all such legislation, but that is a commentary on how slow we have been in addressing such requirements despite our international obligations in this area.
Part VIII of the Bill deals with compulsory and voluntary reporting to the Pensions Board of material misappropriation or fraudulent conversion of the resources of pension schemes. Under the provisions of this part, designated people in the pensions industry, referred to in the Bill as relevant persons, would be obliged under law to bring to the attention of the board in writing the particulars of the misappropriation or conversion. This is a vital aspect of the Bill. I have checked with people in the pensions industry about what some of them see as a whistle blower's charter in this part of the Bill, but there is an industry consensus on the desirability of these provisions and the industry is represented on the Pensions Board. That speaks well for the sense of responsibility of this industry in Ireland.
It is desirable that the publication by the board of any report made to it under this part shall be privileged. This matter is covered by section 85 of the Bill. I am aware of the amount of time which people in the pensions industry and in the public service have devoted to the preparation of this legislation. We owe them a debt of gratitude for the advances made in this Bill. I congratulate the Minister for strengthening the legislation governing this important area of Irish life. It was the late Frank Cluskey who, as Parliamentary Secretary for Social Welfare, prepared a key Green Paper in the pensions field in the 1970's. In those days it was considered an even more specialised subject than it is now, but the vision shown by people like Frank Cluskey in addressing these issues at that time is bearing fruit a quarter of a century later.
I welcome a regulation under the social welfare code which is to come into force in July whereby people who are on occupational pensions but who are within £30 of the statutory pension will be eligible to get those additional benefits which people on statutory benefits have, such as free television licences and free phones. This is not just an important practical measure but psychologically it cannot be underestimated how valuable any small benefit like this is to people because it makes them feel that they are of considerable worth within the community. I was extremely pleased when free travel was introduced — it is a long time ago now. There were people exulting in the fact that they would get free travel but who never used it at all or perhaps only occasionally to go on the bus. These are small things for the State but can be extremely important for people. There is a considerable number of people on small occupational pensions. I was extremely glad that the Government extended these benefits to people on occupational pensions.
Elderly people are not being assessed too harshly for medical cards. I do not get nearly as many complaints as I used to get years ago about people being cut off, particularly if they are on expensive medication. There is a general realisation, for which I compliment those working on these areas, that it may be cost effective to try to allow people to manage their own lives as much as possible. When people are able to stay outside nursing homes or hospitals and manage their lives in their own homes, with just a little help from the State, it allows them to keep their independence. It is not only humane and the right thing to do but it is extraordinarily cost effective. I welcome this attitude in the Departments of Social Welfare and Health.
The 1990 Act was extremely important for women because it introduced equality between men and women in occupational pension schemes, which was the 15th recommendation of the 1972 Commission on the Status of Women. That recommendation stated that where a woman is ineligible to enter an occupational pension scheme before a certain age or before she has a certain number of years service in employment, and where such a condition does not apply to a male employee, if the woman remains in the employment to pension age, her pensionable service should include the years during which she was precluded solely by reason of her sex from joining the pension scheme. It also stated that the compulsory retirement age for women from an insurable employment should not be lower than the age at which the social welfare retirement pension is payable. Finally, it stated that the amount of the lump sum which a widow may receive under a pension scheme without compulsion to purchase an annuity should be substantially increased. It was extremely important that these suggestions were taken into account in the framing of the Pensions Act, 1990.
I still get complaints from women because they had to leave employment for domestic reasons. For example, if they must spend a certain amount of time at home rearing children or they must leave employment to care for elderly relatives when they themselves are near retirement age, the situation for some appears to be invidious and I am not sure whether this Bill addresses this matter. Perhaps we can clarify that on Committee Stage. Older people who must leave work to care for elderly relatives are in a worse position. At least if a person leaves the workforce to look after small children, each year the child grows older. A number of women in particular leave the workforce in their 40s or 50s to care for an elderly relative thinking it will be for three or six months but it ends up being for three, six or nine years and then they too are practically of pensionable age. This is an area to which we must give careful attention because I have had complaints from women who have tried to buy back into schemes and not been in a position to make up their payments.
I still get complaints from women who had to leave the workforce before the removal of the marriage bar. One nearly hesitates to admit that one remembers those days because when I talked about them to younger women they thought it was hysterical that women had to leave the workforce when they got married. It is important to remember that was the practice only about 20 years ago, so there are still women in the 40s and 50s who had to leave the workforce and are now trying to get back into employment. There is this huge gap through no fault of their own where they were not in a position to buy pension contributions.
I support what Senator Kelleher said about the need to ensure women are treated equally. When divorce legislation is introduced, some of the pensions legislation will have to be examined. However, with the framing of this Bill, I am sure that will not be too difficult. I congratulate the Department on its efforts.
Let me prefix my comments on the Bill with a brief reference to a point made by Senator Henry. When people find that their small pensions are assessed in full for tax purposes some of them are very angry.
I welcome the Bill because it builds on the achievements of the Pensions Act, 1990, which ensured that the rights of pension scheme members and their dependants are properly safeguarded, and provided for mandatory disclosure of information to scheme members. The Pensions Act, 1990, also established the Pensions Board and this Bill results largely from a review of that Act undertaken by a subcommittee of the board.
The provisions of the Bill are largely self-explanatory and the comprehensive explanation by the Minister on each section of the Bill was worthwhile. The provisions are geared towards protecting the interest of pension scheme members and in this regard I particularly welcome section 38 which makes it mandatory for certain people to report in writing to the Pensions Board where they have good cause to suspect misappropriation or fraud.
The whole area of pensions is a complex one which baffles many people. For this reason it is vital that pension scheme members receive clear and accurate information regarding the pension they can expect at the age of 65. Such information must be presented in a manner which is easily understood by the ordinary citizen — few of us, after all, are financial experts.
If I heard Senator Finneran correctly, he said that a couple receiving £800 per month from the farm retirement scheme would be forced to apply for a non-contributory pension. That is ridiculous and I look forward to hearing the position clarified.
In recent months there have been demands from certain sectors to reduce or even abolish contributions to the social insurance fund. Given the demographic and labour market trends which are likely to occur in the future, it is vital that we preserve and consolidate the social insurance system and its concept of social solidarity. Any attempt to water down that concept in the name of a dog-eat-dog free market must be vigorously opposed.
Pensions and the pensions industry do not simply affect the individual scheme member. It is estimated that the total assets of pension funds amounts to about £16 billion, which is almost 50 per cent of Ireland's gross national product. For this reason I welcome the study currently being undertaken to identify ways in which this enormous financial power can be harnessed to the benefit of the Irish economy.
It is not, however, only the domestic economy which can benefit from the pensions industry. The first obligation of pension fund trustees is obviously to maintain and enhance the value of their funds, and that goes without saying. Within that there may be considerable discretionary scope in the way funds are invested. The concept of ethical investment is one which has gained currency in recent years. Institutional investors have, for example, started turning away from companies which manufacture or trade in arms or which exploit the developing world and I would like to see that trend continue. In the late 20th century both investors and consumers have enormous economic power. It is up to us to decide how it will be used. This Bill will help in that regard.
I agree with the Minister when he says we have made enormous strides in this area since 1990. All self-employed people can now contribute to the pensions scheme so that when they retire they will be able to claim a contributory pension. I am worried that some self-employed people have decided to stay outside the net. They will face difficulties in the future when they try to clear up this mess. The objective was to ensure that everyone was entitled to a contributory pension on retirement. The regulation of the occupational pension scheme has been excellent. The Government is making every effort to ensure that when people get old and retire from their work, they will not be dependent on anyone.
People with small pieces of property are concerned that when they retire they will be means tested and, as a result, they will not have an adequate amount of money on which to live. Property is evaluated differently from the way it was done in the past. When people apply for a medical card they are shocked that the means test is more stringent than it used to be and that it is not operated in a laissez faire manner as was previously the case. Department officials must apply the regulations, but everybody should be treated fairly.
We are making great strides in this area. I compliment the Minister for bringing this Bill before the House. I hope it will pass through the House quickly and that it will be as successful as other similar legislation.
I thank all the Senators who contributed to the debate. This Bill reinforces the safeguards already in place in relation to occupational pensions. It will strengthen the certainty that when individual members of schemes reach retirement age, their pensions will be waiting for them to ensure their continued prosperity. I agree with Senators about the importance of pensions.
Senator Kelleher mentioned the mobility of workers. The preservation provisions of the Pensions Act, 1990, ensure that those who move from job to job will have their benefits preserved in each job until pension age. As regards the ageing of the population, the House should be aware that on a number of occasions the Minister for Social Welfare has drawn attention to the demographic patterns which indicate a considerable increase in the proportion of elderly people in the population over the first half of the next century. This will have a significant impact on the future costs of social welfare pensions, which are set to increase by 100 per cent by the year 2035. At the same time, the ratio of persons in the economically active age group to those over the age of 65 is projected to fall. This would result in the absence of any policy change on the cost of pensions falling on future generations of PRSI contributors and taxpayers.
These are important factors in any consideration of the development of future pension arrangements and of the social insurance fund and they require us to consider the capacity of the present financing arrangements to meet these emerging costs. Senator Sherlock raised this point. The pensions industry is also placing considerable emphasis on this aspect at present. One aspect which needs to be examined further in this regard is the effect of long-term economic growth. If this is maintained, it should increase the resources available to pay for pensions in the future, although, as the House will appreciate, there will be many competing demands on those resources.
The final report of the Pensions Board, Developing A National Pensions System, raised and considered these issues. The report is being considered in the Department at present and the Minister intends to bring forward proposals based on its recommendations in next year's budget. In this context, a major survey of occupational pension schemes, which was recommended by the Pensions Board, has been commissioned jointly by the Department of Social Welfare and the Pensions Board and a report will be available before the end of the year.
As regards Senator Kelleher's concerns about young people and pensions. I agree with him that information in this regard is vital. The Pensions Board has set up a committee to look at information and the targeting of young people to encourage them to look at their pension needs at a young age. This will be included in their deliberations.
I support Senator Henry's points about a pension provision for women, especially those who are carers. Our approach to caring and to the needs of carers is a major priority for the Minister for Social Welfare, which he is discussing with the pensions industry. Both Senator Kelleher and Senator Henry referred to pensions in the context of divorce. The Minister for Equality and Law Reform, Deputy Taylor, is bringing forward legislation on divorce. Pensions will be addressed in that Bill, which I am sure will be fully debated in the House.
A number of Senators mentioned the social welfare entitlements of self-employed people, particularly those who were over 56 in 1988. To qualify for the old age contributory pension, a person must have entered insurance at least ten years before pension age. This condition has been a feature of the scheme since its introduction in 1961. The purpose of the condition is to link entitlement to a pension with a reasonable level of contributions to the social insurance fund during the course of a person's career. This condition applies to self-employed persons in the same way as it applies to all insured people. Accordingly, self-employed people who became insured for the first time when social insurance was extended to the self-employed in 1988 and who were then aged 56 or over would not qualify for an old age contributory pension. They are covered for survivors' and orphans' pensions. However, self-employed people in that age group who have been insured as employed contributors for any period prior to the age of 56 could qualify for the old age contributory pension as such insurance can be combined with insurance as a self-employed contributor for old age pension purposes.
The Pensions Board in its final report, Developing A National Pensions System, puts forward, inter alia, a number of recommendations relating to eligibility for old age pensions, including proposals for a wider range of pro rata pensions related to the average number of contributions over an insured lifetime. However, it also recommended that the number of paid contributions to qualify for an old age contributory pension be increased from 156 to 520 contributions. The report and its recommendations are being studied in the Department of Social Welfare at present. While in principle, a pro rata pension approach is favoured, there are no plans to relax the requirement that a person must have entered insurance at least ten years before pension age.
Senator Finneran alluded to the issue of equal treatment. As I stated in my speech, clarification of a number of European Court cases and directives on equal treatment as regards pensions are being considered and the outcome of these may necessitate further changes in our pension legislation. These matters will be considered in conjunction with the Pensions Board in due course and, if necessary, amendments will be made through a future Pensions (Amendment) Bill. Senator Wall also raised the issue of equal treatment. I wish to point out that the equal treatment provisions of the Pensions Act have been in place since 1993. Current amendments introduced in this Bill are simply a clarification of existing provisions which provide for full equal treatment between men and women in occupational pension schemes since the date of the Barber judgment on 17 May 1990.
Reference was made to the necessity for a pensions ombudsman by Senator Finneran and others. Other Senators also raised the important issue of information. I indicated that the issue of an ombudsman is one of the issues facing the new Pensions Board over its term of office and it is one of the areas it will be asked to report on. On the issue of general information, information must be made available to pension scheme members via both the annual report of the scheme and their requests to the trustees in regard to particular schemes under the disclosure provisions of the Pensions Act, 1990.
There may be a lack of knowledge among individual members about where to get information and this will need to be addressed. In this regard the Pensions Board has set up a subcommittee on information. One of the areas it is addressing is how to disseminate information so that members will be aware of the information available to them and how to get access to it.
Senator Finneran made reference to extending the membership of the Pensions Board by including a member from the consumer association, a pensioner and a self-employed person. Presumably these people would primarily represent pensioners. This was considered in detail as a number of representations in this regard were received before the Bill was published. It is considered that the Irish Congress of Trade Unions representative — there will be two after the enactment of this legislation — along with the three nominees of the Minister and the official from the Department of Social Welfare on the board will more than adequately serve the interests of all members of pension schemes, including pensioners. Some of the current board members are self-employed and I am sure they will adequately express the views of self-employed people to the board while also serving the interests of all members of pension schemes.
Issues raised by Senator Finneran in relation to the farm retirement scheme are proper to consideration by the Minister for Agriculture. The Department of Social Welfare has taken a neutral approach to this package in that it does not assess this income in relation to a social welfare recipient over 66 years of age. As I understand it, the complicated rules regarding the assessment for receipt of the farm retirement package are laid down by the EU.
The Bill was published in midDecember with the specific intention of allowing Members of the Oireachtas, those in the pensions industry generally and all contributors to and beneficiaries of occupational pension schemes sufficient time to examine its provisions. As has been indicated, it is all the more important to allow a reasonable time scale as the Bill is quite technical. In this regard I wish to inform the House that there has been an ongoing discussion with the Pensions Board on this Bill. In addition, the Department met all those who have made representations on the Bill. I agree with both Senators Howard and Cotter that it is important that this time was given to allow full consideration of what is primarily a technical Bill. I believe this Bill will significantly help to further safeguard the pensions of individual members of pension schemes and I therefore commend it to the House.
Question put and agreed to.
Committee Stage ordered for Wednesday, 26 June 1996.
Sitting suspended at 4.50 p.m. and resumed at 6 p.m.