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Seanad Éireann debate -
Thursday, 29 Mar 2007

Vol. 186 No. 18

Social Welfare and Pensions Bill 2007: Report and Final Stages.

Before commencing, I remind Senators that a Senator may speak only once on Report Stage, except the proposer of an amendment who may reply to the discussion on the amendment. On Report Stage, each amendment must be seconded.

I move amendment No. 1:

In page 46, after line 29, to insert the following:

Insert the following section after section 10:

"Provision of information on deferred members.

10A.—The Board shall have the authority to compel relevant organisations and companies to provide information as to the number of each of their deferred members, and such other information as the board may, from time to time and in accordance with the provisions of the Data Protection Acts 1988 to 2003, require.".".

I do not wish to labour this point but we had only a brief discussion on the matter last night so I will finish what I wanted to say. I wish to impress upon the Minister the importance of including this provision in the legislation. I welcome the fact that he said the results of the survey would be available tomorrow and he might let me know when I will be able to obtain a copy.

The amendment does not just relate to deferred members but to other information as required by the board. A Green Paper on pensions will be published in the middle of April, which may throw up other areas in which further information is required of the Pensions Board. I do not want to go through the same lengthy process in getting information from the Pensions Board as I had to in getting information on deferred members. It is grossly unfair to spend 12 years seeking information from the Pensions Board. If, on reading the Green Paper on pensions, we find we need further information from the Pensions Board the board should be in a position to get that information as quickly as possible from the relevant companies, for Members as well as the Minister.

My amendment seeks to strengthen the powers of the Pensions Board so that it is in a position to ask companies for information. That is not too much to ask. The Minister did not answer my question as to why he was not willing to give those powers to the Pensions Board. He said that companies had co-operated fully with the board but it has taken considerable time, even since Mr. Brendan Kennedy promised to provide the information. I suspect the delay has been caused by the fact that the Pensions Board has not had the powers in years past to get the information. Therefore, I again ask the Minister to accept the amendment in the interest of transparency and expediency when we require information. Yesterday I promised the Minister that I would outline some of the correspondence that individuals have had with the Pensions Board on securing the information on deferred members. In a reply in 1995 Mr. Horgan from the Department of Social Welfare stated:

The Department of Social Welfare in conjunction with the Pensions Board have commissioned a detailed survey of occupational pension cover in Ireland in order to establish the extent and level of pension coverage in this country. The results of this survey will yield the statistics regarding deferred pensioners and their entitlements.

However, that survey did not provide the information we require on deferred pensioners. In 1998 Mary Hutch from the Pensions Board stated, "The queries posed by you in relation to deferred frozen pensions will be considered in the context of the next such survey to be carried out by the Board." We still did not get the results of that. I do know whether the Pensions Board got the information, but I have not been able to see the results of that survey.

In 2000 Mary Hutch from the Pensions Board stated, "There has not been any national survey of pensions since the ERSI survey of 1995 and therefore, I do not have any more up to date information since then." The board either had or did not have the information on the deferred members. Again in 2000 Mr. Eamon Heffernan of the Pensions Board stated, "I am sorry you have not been able to get the information you require." I am just quoting the relevant points from the letter highlighting my inability to get information from the board. In 2001 Michelle Cusack of the Pensions Board stated, "The regulations require that numbers of active members only be furnished, as it is on the basis of those numbers that the fees payable to the Board are calculated."

It speaks volumes that the Pensions Board is only interested in active members. While I do not have its mission statement, surely it exists to look after the interests of those who take out pensions regardless of whether they are active or retired. I imagine it should also include those who are retired. As they get fees from active members' policies or from the industry, it is only interested in those, which is not good enough. If we want a clear picture of how our pensioners or those about to become pensioners are doing with their pension plans we need to have full information from the board, which needs to be in a position to provide it.

In the late 1980s and early 1990s when the country was not in a very good economic state many people were being made redundant. Approximately 400,000 were made redundant in 1990. All those people will have frozen benefits and will be coming up to retirement or may have already retired. I want to know what kinds of pensions those people have. I have a very good idea, because I know many of them. These are the people I have been trying to represent in trying to establish how well or badly their pensions have served them. They have frozen benefits and no indexation and yet nobody from either the Pensions Board or the Department seems to be concerned about these pensioners with very poor pensions. All we hear about is encouraging young people to take out pensions. How can we encourage people to take out pensions if we do not know how well they are doing?

Many companies have let down their employees by changing their pension plans from defined benefit to defined contribution. They also do not provide indexation. These issues need to be addressed. I hope they will be highlighted in the Green Paper and that changes will be made in order that young people who decide to pay into a pension plan today do not experience what happened to their parents and grandparents before them.

Pensions to date have been driven by the industry. I am not against people making profit — that is what runs our country. However, I am opposed to them running their businesses at a profit for themselves at the cost of the ordinary worker, with the Government and Pensions Board standing by and not addressing the problems. We know the industry is doing very well and making large profits. The chief executives and others at the top of those companies are retiring on enormous pensions. They are getting lump sums of in excess of €5 million and a very nice index-linked pension for their retirement. While they look after themselves, they preside over a business that does not look after the majority of people who have paid into pensions over the years.

I commend the Minister on having published the green paper. I regret he will not be there to see it through and implement changes that I believe are necessary.

While he may be there, I may not be here to keep pursuing it and I seem to be a lone voice. I will do my best to ensure I return to this House to annoy whoever the Minister might be and see through the matter. I am doing this in the best interest of the people who have not been well served and in the interest of all the young people who are being encouraged at every hand's turn to take out pensions.

The people coming up to retirement or who have already retired were compelled to join pension schemes. Some young people joining companies today are still required to join the company pension plan, which is not right. I do not believe in compulsory membership where people have no control and are given a false sense of security that their pensions will be secure. We know that is not the case and something needs to be done about it. I hope the Green Paper will bring about change in this regard. We have seen many reports from the Pensions Board that do not address this area, which represents a major flaw in the system. We need to change the membership of the Pensions Board. The board needs more ordinary members and workers, who experience the difficulties I have highlighted. Too many members of the board have a vested interest which is not good for any board.

I thank the Minister for his interest in the area. I am concerned we have not achieved anything since I first started highlighting the issues concerning occupational pension schemes. I ask the Minister to consider accepting my amendment. It does not just concern deferred members; it is about future information that we may want after implementation of the recommendations in the Green Paper or at any other time. We are entitled to get that information, which should be made available. When members of the public write to the Pensions Board or to the Department, they are entitled to an honest answer and not to be fobbed off with the types of responses I read out earlier. It is a disgrace for such answers to be sent by any Department or by the Pensions Board.

Is the amendment being seconded?

I second the amendment. Senator Terry spoke eloquently on her amendment. It is a matter about which she has spoken in this House for the past five years. She is sticking doggedly to her task in this area. I ask the Minister to give consideration to accepting this amendment.

If not today then at some other point, perhaps the Minister might come back to me on the question I raised about allowing pre-1953 contributions for the calculation of benefits. There are a very small number of people in that category.

I thank the Senators for this amendment. It is probably better for us to make departures in this area in the context of the Green Paper which I hope to publish some time in the middle of April. A considerable amount of work has gone into it. I have had the opportunity to look at some of the early drafts of the Green Paper which is very exciting. It fully rehearses all the options and does not dodge any of them. It will be a very strong focal point for discussion on pensions and will lead to very strong and sensible action in the pensions area.

Lest I do not have the opportunity again, I wish to state that by highlighting these points in my time, Senator Terry has done the Seanad and the country a good service. I mean this sincerely. It is a complicated area, but I know Senator Terry's passion and commitment to ensure the industry behaves, the Pensions Board has teeth and consumers are protected. This is my agenda and that of the Senator and any Minister in this area.

We have come a long way. Between us we have put pensions to the top of the national agenda in recent years. It was the one of the major items for discussion in Towards 2016 and the subject of a number of national debates, pensions forums and many Government, Dáil and Seanad discussions. Pensions have rightly come to the top of the agenda.

We have an expanding workforce of more than 2 million. In respect of coverage, 930,000 people, of whom approximately 500,000 are women, still do not have occupational pensions, so this is of particular concern. I saw a figure stating that more than 80% of people in the retail sector did not have any cover.

I know cover is only one side of it. There are also the issues of adequacy and security which will be rehearsed very strongly in the Green Paper. The more other people and I argue for coverage, for example, that those 500,000 women should have pension coverage, the more responsibility we have to ensure that when they get that cover, it is secure. This is an additional responsibility we have and we must look closely at it in the context of the Green Paper.

Accepting any amendments today would take me back to the Dáil. I have a statutory deadline of 1 April 2007 in respect of this legislation. In any case, I would prefer to make these kinds of changes in the context of a Green Paper. If, for one moment, I thought that the Pensions Board was not receiving co-operation, I would table this amendment myself. The board, which is a State regulator, assures me that it is getting a very high level of co-operation and that it does not see any reason it cannot continue to get this co-operation in the future. It is incumbent on the industry to co-operate with the State regulator, which is the Pensions Board. The industry has a duty to do this.

Senator Terry referred to information in respect of deferred pensions of those in occupational pension schemes who do not qualify for the preservation and revaluation of their pension rights, as provided for when the Pensions Act came into force in 1991. I am aware that the issue of deferred members of occupational pension schemes has also been raised in the Oireachtas Joint Committee on Social and Family Affairs. As I pointed out yesterday, the Pensions Board is finalising its survey of occupational pension schemes with at least 1,000 active members seeking data on their deferred members. The board expects to be in position to give the results of this survey to the members of the Oireachtas Joint Committee on Social and Family Affairs tomorrow. I understand from my officials that this information will be sent by courier to each member of the committee during the course of business tomorrow and I hope they find it useful.

The survey will provide the information necessary to estimate the cost of extending preservation to those deferred members. The provision of adequate and timely information is a vital element in enabling the Pensions Board to monitor compliance of national pension schemes. I call on the industry to continue to co-operate fully and transparently with the Pensions Board and to provide it with full information. If this is not forthcoming, and I have no reason to believe it will not be, there will be many other opportunities in the context of action on foot of the Green Paper to introduce the kind of amendment the Senator wishes to put through today. This would be a better time in which to do this.

I formally say to the industry that it should continue full co-operation. I have no reason to believe it will not do so, but I and, I am sure, any Minister would not hesitate to introduce this section if it were required because it is Government policy and the policy of, I am sure, of both Houses that the industry co-operates 100% with the board and that members of the public, especially Members of the Houses of the Oireachtas, who seek any information will receive it. I am not privy to the detail other than what was read out by the Senator.

It is incumbent on any State board, particularly a regulator, to treat Members of the Houses of the Oireachtas with full respect and dignity and supply whatever information they are legally permitted to supply. I do not have any great knowledge of other aspects of the Senator's dealings with the particular board, other than that which was read out by the Senator, but Members of the Houses of the Oireachtas must be treated very respectfully and the information must be given. I am not suggesting that this did not happen. I am making a general statement with regard to Members of both Houses. We are honoured to be public representatives and, as such, State agencies have a special duty to supply in a timely fashion information we require to enable us to do our work. Obviously, this must take place within the confines of the law dealt with by the particular State board.

Unfortunately, I cannot accept the amendment but I do not have a difficulty with the concept of it. I have said what I have said about demanding full co-operation with the Pensions Board. There will be many more occasions with other Bills in the wake of the Green Paper for the amendment put forward by the Senator to be taken into law. It is probably best to leave it at that on this occasion, given the timescale we have and given that the Senator is about to receive data tomorrow from the Pensions Board. We will leave it there for the moment. I ask the industry to take careful note of what I have said in the Seanad today.

In respect of the question raised by Senator Cummins, to qualify for a contributory pension a person must satisfy a number of qualifying conditions, including the average contribution test. An average of ten contributions is required for a minimum payment, and 48 for a maximum pension. The test is designed to demonstrate an ongoing commitment to the social insurance system. However, it does give rise to anomalies with people with the same contribution totals possibly getting a different payment, depending on the period over which their record is averaged. The test can also have a dramatic impact on entitlements where a person has a significant gap in their records. We have all had our clinics flooded with people who have such gaps in their records. The Green Paper will examine these issues, including, in particular, where gaps occur. The matters are fully discussed in the Green Paper and options will be put forward for consideration. I do not want to kick everything into the Green Paper but its publication is imminent. It is the result of many years of reports, studies, research, discussion and political debate. We will shortly have, within two covers, fairly stark choices to make. The options will be laid out professionally, including the arguments for and against. It will then be incumbent on the Government of the day to make some fairly tough decisions. The start of a Government's term is probably a better time to make such decisions than at the end of its period in office.

I thank the Minister for his response. I regret that he is not accepting the amendment today but he has said he will consider it in future if necessary. My amendment should not cause any trouble for anyone, but would strengthen the powers of the Pensions Board. It would be a good provision when and if the board encountered any problems with a company in trying to secure information. I have said as much as I can on this matter, however.

I agree with the Minister that the Pensions Board, or any other body designated to act on behalf of the Government, should treat elected Members with respect and dignity. I am not just looking for answers for myself or other Members of the House, I am seeking more than that because members of the public are also entitled to such information, either from the Minister's Department or the Pensions Board. It is obvious that over a period of 12 years the Pensions Board did not want to provide this information. I still do not understand why the board did not want to do so. We will now get it and perhaps when we do, it may be clear why the board did not want this information in the public domain. We must ensure, however, that information is made available when requested. That is what the board is there for. Taxpayers' money is keeping the board's members in their positions, although I know the board also receives money from the industry, which concerns me. If one of their paymasters is the industry, then their position is not entirely independent. I would prefer if the Pensions Board was completely funded by the Government. In that case, the board may be more accountable to the Government and members of the public.

I look forward to reading the Green Paper and hope we will be able to make changes. People should be able to look forward to retirement and enjoy their pensions when that time comes. Unfortunately, most pensioners today are dependent on the State pension for the majority of their income. I regret what the Taoiseach said last weekend in his Ard-Fheis speech — that if returned to Government he would propose a reduction in PRSI contributions. That worries me because nobody has ever said to me that they would like to reduce their PRSI contributions. People realise that the social insurance fund is a very good thing and delivers welfare benefits, which I praised in yesterday's debate. The fund delivers a good State pension to all our pensioners and, while it needs to be strengthened and improved, it has served us well. I would be concerned by any proposal to reduce the fund at a time when we have a surplus because who knows what the next five, ten or 15 years will bring. I hope such a step will not be implemented.

Amendment, by leave, withdrawn.
Bill reported without amendment and received for final consideration.
Question proposed: "That the Bill do now pass."

I wish to thank you, a Chathaoirligh, and other Members of the Seanad for their speedy consideration of the Bill. I regret I was unavailable to attend the House earlier in the week but I read carefully everything that Senators said during the debate. I have been in the House as often as I possibly could. The debate on Committee and Report Stages threw up some enlightening subjects which we can pursue. I also wish to thank my officials and their staff who have put much work into this legislation.

The Bill is enormously detailed and requires a lot of professional expertise. We are all indebted to the skilled officials who have supported our work in passing this legislation. I look forward to the Bill's early signature into law. The enactment of a major portion of the Bill's provisions will start on 1 April.

I thank the Minister for his work in this area since he took over his current portfolio. It has been a pleasure to work with him as he is always open and willing to listen and has agreed with many of the points I have made. We will need more time to take on board some of the recommendations that will hopefully come from the Green Paper. Beidh lá eile, as they say.

I also wish to thank the officials. Any criticisms I may have made of the Department are in no way criticisms of any individuals. Everybody has a job to do and it is not always easy. I wish to thank the Minister and his officials for their work on this and other Bills from that Department. I hope we will all be back here again to continue our work.

I thank the Minister and his officials and compliment them for having produced what is certainly recognised as an outstanding Bill. I also thank Senators Terry, Cummins, Cox and others who made fine contributions to the debate on this legislation. The pension increases provided for are welcome. The Minister has been a breath of fresh air in his Department. I can remember pensioners complaining that they did not receive increases until the end of the following year, so the earlier payment dates are welcome. The Minister's commitment to introduce pension increases that are well ahead of inflation has been recognised by those who require such payments to survive. During the Minister's term, pensions have stayed well ahead of inflation, which means he has looked after those most in need. People approaching retirement feel happy that the Minister and his Department are on their side.

Many important amendments the Minister could not accept were tabled on this Bill but these worthwhile contributions may be considered in future Bills. This reflects well on members of the Opposition who put forward solid amendments the Minister may wish to consider for future legislation.

Question put and agreed to.