This is a technical amendment to certain schemes which are perpetual funds. Section 61 of the Pensions Act provides that certain sections of the Perpetual Funds Registration Act, 1933 shall not apply to pension schemes. Section 7 of the 1933 Act provides that no alterations to the rules of a registered perpetual fund shall be valid or have any force or effect unless or until such alterations are registered in the register of perpetual funds. The section is considered inconvenient by registered pension funds and most pension schemes are amended on a retrospective basis, whereas the registrar took the view that section 7 of the 1933 Act did not permit him to register retrospective amendments. This is the main reason section 7 and other sections with supplementary provisions were disapplied in the case of pension schemes. The existing wording of section 61 solved this problem for any schemes which merely registered as perpetual funds. However, some schemes provided in their rules that no alteration to these rules would be valid or would have effect until such time as the alteration was registered by the registrar. It is arguable, therefore, that in some cases a "catch-22" exists, whereby a separate provision in the rules of the scheme states that changes cannot be made unless the alteration is registered with the registrar, even though registration under section 7 is no longer possible. This amendment seeks to put the validity of any amendments to the rules of schemes described above beyond any doubt. I recommend the amendment to the House.
Pensions (Amendment) Bill, 1995: Committee Stage (Resumed).
On committee procedure, at the vote last night a number of people from various parties were missing, including Labour, Democratic Left and the Progessive Democrats. Under the voting procedure it was possible for people to stand in across parties on the Government side, so if a Labour party Member was missing a Fine Gael or Democratic Left Deputy could stand in. The Government consequently had little difficulty making up absences by nominating other Members from within its ranks. That did not seem to be possible on the Opposition side; while Fianna Fáil Members were there in full strength and a Fianna Fáil Member was able to replace another who was away, the Opposition could not provide for such replacements on a combined basis. Is it possible for the Opposition Members to stand in for each other between parties, or to substitute for an Independent Opposition Member? One Independent Deputy was missing and would have been happy to have somebody represent him. Is it possible to do that on the Opposition side?
No, a person can only be represented by a member of the same party or grouping. The Government side are grouped for that purpose.
I thought so, but I wanted clarification. It means in effect there is no difference on the Government side where all Members are grouped together and can represent each other but it is not possible to do that on the Opposition side. This arose last night in the context of a vote. The Government parties set out to collectively suppress the Opposition at a time when the Opposition felt it was reasonable that the spokesperson for the Opposition would be here when this Bill was being debated.
I would like the chairman to convey to the Government that if it is to act in this way in future and if it has set a precedent of not working on the basis of co-operation, understanding and peaceful remedying of problems, we will have to re-examine the rules. Yesterday we had an extraordinary situation where this Bill came before this committee for the first time ——
We cannot have a debate on the issue now. We are here to discuss the Committee Stage of the Bill. I have given the Deputy very generous latitude to make his point. There is nothing we can do as a committee; it is a matter for the House. The relevant Standing Order is No. 89. I have been very generous in allowing the Deputy to make his point but there is nothing we can do about it, either this morning or indeed at any other stage. It will have to be taken up in another forum.
I only asked that the independent chairman of this committee would not the point and bring it to the attention of——
I have been very generous in allowing the Deputy to make the point. The point has been made. The procedure was quite in order last night.
Procedure is very important, especially in this new environment which does not facilitate cooperation between the two sides. The Government has pushed aside the Opposition.
That is a matter for the House.
Last night was the first time we encountered serious difficulty and were pressed so hard to have legislation put through Committee Stage. As far as I can recall, we had never experienced cross representation by the Government grouping. It may have happened before but in the circumstances in which we found ourselves last night it lead to a certain amount of consternation on our side.
There was a breach of trust or faith among the convenors yesterday. The Bill was introduced to us yesterday and the committee was pressurised to push it through in one day. That is not the right way to deal with what is considered to be important legislation. The opening amendments took up a considerable amount of time and the debate was very informative. It was then expected that we would finish Committee Stage fairly quickly thereafter. We might well have done so but we could not give a guarantee that we would finish it within one and half or two hours.
We are in the same situation this morning. I am both concerned and annoyed. I conveyed the convenor's agreement, which I thought had the chairman's blessing, to our spokespersons, Deputies Walsh and Woods and the other members of the committee. I told them that it had been decided, albeit informally as the chairman said yesterday, that we would meet again on Thursday next at 2 p.m. and they proceeded to fulfil their other engagements. I found it awkward and difficult to have to chase around the House to ascertain whether they had left.
It added to my consternation when I was confronted with what appeared to be the Minister insisting that we proceed. I thought this committee ordered its business and made decisions, acting as a whole. Generally speaking that has been the way since this committee was established and it has worked very well indeed. I was confronted with a situation where the section we are now discussing was being put and, in the absence of my colleagues who had done the work and put down the amendments, I had no option but to call a quorum to give some latitude and subsequently to press the matter to a vote to gain time.
Fair enough, the Minister intervened to say he would be prepared to co-operate with an adjournment until 6.30 p.m. This committee has always co-operated with Ministers who have come to the committee to conduct their statutory functions. Last night that broke down after an informal agreement which was arrived at in the normal way.
It does not augur well for future cooperation from this side of the House. I hope we get back to the previous arrangement which worked very well for everybody, including Ministers who I accept sometimes have difficult time schedules to which they must adhere. I was disappointed the agreement we entered into was not followed through or defended by the chairman who had always acted in the best interests of the committee and its membership on previous occasions. It is important to start by putting that on the record.
I have allowed 15 minutes. A decision was made by this committee last night, to which no one objected, that we would continue the consideration of the Committee Stage of this Bill at 10 a.m. this morning. I am bound to follow that decision and I intend to do so. Can we do what we decided to do last night, that is, consider the Bill?
We forced a vote on that issue.
Yes, it was decided but when the substantive motion was put it was unanimously decided that we should meet today at 10 o'clock to consider the Bill. It is now 10.20 a.m. and I have given over 15 minutes to Deputies to more or less repeat what was said last night. I am now asking the meeting, in accordance with the committee's decision, to proceed with its consideration of amendment No. 12.
I would like to speak to the amendment, if that is feasible in a democracy.
It is. The Deputy could have spoken to it for the last 20 minutes, so please speak to it now.
Yes, and I could speak to it for the next 20 minutes. One is entitled to speak. The most important thing here is freedom of speech. The Minister was irritated last night and enforced his views on the committee, but that is a matter the committee will have to face. What happened was an unfortunate and sad precedent because in future——
Members appoint a Chairman to run a meeting, but if the Deputy will not address his remarks to the amendment there is no point in my sitting here or in the meeting continuing. The Deputy should address the amendment. I have given over generous latitude but I think the Deputy is exploiting my generosity.
I formally protest at holding this committee meeting without the presence of the Fianna Fáil spokesperson who is unable to be here. He dealt with 21 sections yesterday the first day this Bill came before the House.
In relation to this section, the spokesperson did the preparatory work and was prepared to discuss it quickly, and he did so yesterday. There were extraordinary events in the afternoon, which were not of our making, with the Blood Transfusion Service Board's representatives taking a good deal of time. I register my protest at these events.
I will now deal with amendment No. 12 which relates to section 22 dealing with the rule against perpetuities requiring that trust cannot continue beyond the lives in being on the commencement of the trust, plus a further period of 21 years.
In the amendment the Minister seeks to insert a new section — 22 — which is, in effect, an amendment of section 61 of the Principal Act. The new section says that section 61 of the Principal Act is hereby amended by the insertion of the following subsection (2): "the validity or effect of any alteration in the rules of the scheme shall not be affected by the failure to register such alteration in the register of perpetual funds notwithstanding any provision in the rules of the scheme requiring such registration".
In moving this amendment the Minister told us the difficulty is that a registration cannot be made retrospectively. That is not unusual in law. We are familiar with many situations in which one is not allowed to introduce retrospective legislation. However, the Minister tells us the main reason for putting this forward is that it can be inconvenient. Many things are inconvenient but are they right and whom do they affect?
We are saying that the validity will not be affected by the failure to register such alterations. Can the Minister tell us the procedure for registering alterations in the register of perpetual funds, and the implications of retrospective registration? Do any implications arise directly from this? Will anyone be adversely affected if we agree with the Minister and include this amendment? That is our main concern.
It is always dangerous to say it is just a matter of convenience. I know it is a general rule that one does not involve or engage in retrospective legislation as apart from anything else, it can introduce an air of laziness about the performance and administration of schemes. If there is no requirement to take an action and it can be done later, then it is obviously something one will not be too worried about. It will not have a high priority.
The Minister seems to believe that it is not too important and he is acting on advice in that regard. Has this matter been considered by the committee of the Pensions Board? Has the Minister received representations from the industry about this change? We have not had any requests to change this section of the legislation, or to set aside the normal procedures or requirements. Has the Minister consulted the industry? What views were given to him, and when?
Section 61 of the 1990 Act deals with the issue comprehensively. As Minister for Social Welfare the Deputy introduced this section. So, for him to suggest that in some way I am introducing a new concept is erroneous.
In this instance, I am tidying up an anomaly arising from the way in which the issue of perpetual trusts was dealt with in the 1990 Act. The amendment was proposed by the Pensions Board. Registration with the registrar of perpetual funds is not a requirement of the Pensions Act and this amendment is to put beyond doubt that registration is not required.
The problem of retrospection arose in the first instance because most pension schemes are amended on a retrospective basis, whereas the registrar took the view that section 7 of the 1933 Act did not permit him to register retrospective amendments. That anomaly was largely dealt with by the Deputy in section 61 of the 1990 Act. I am closing a "catch 22" which persists, at the request of the Pensions Board.
Retrospective amendments to a number of schemes have been necessary, in some cases quite significant amendments, many of which have improved the situation of women. A greater demand may be anticipated in this section and it is important to close the loopholes.
As Government convenor to the committee, I consider yesterday's events to have been exceptional. Attempting to do business in such an atmosphere leads to an enormous waste of time. I will do all I can to ensure we do not have such pressures and we can order our business in a way that will avoid a repetition of the stresses the committee experienced yesterday.
The voting procedures were established by Deputy Woods's party when in Government. They are an in-built assistance to the Government which helps the stability of the State which we do not wish to disturb. We should avoid such pressures at the committee because they lead to time wasting.
I asked the Minister to give instances or examples. He referred to section 61 of the Principal Act which states:
Sections 7, 8, 10, 12, 12(2) and, in so far as it relates to those sections, section 14 of the Perpetual Funds (Registration) Act, 1933 shall not apply in the case of a scheme.
I sought some examples of where it would apply currently.
Deputy Flaherty pointed out in relation to yesterday's events, the procedures have been established for some time by agreement between the parties.
Just as we have to re-examine legislation to see where it works well or does not work well, we also have precedents in committee procedures and we will have to look at how well they work with a view to altering them.
Deputy Flaherty attempted to give some examples of where the provision might apply. The Minister has told us that the Pensions Board has made this request. Therefore, presumably, the committee of the Pensions Board considered the matter and has recommended the change. Will the Minister give us some practical examples of where this would apply?
I do not have the names of schemes but there are a number of schemes which say that changes cannot be made unless the alterations are registered with the registrar, although under section 7 registration is no longer possible. This amendment is to ensure that the validity of any changes to the rules of schemes is beyond doubt.
The Minister says he is not in a position to give us any practical examples. I would be happier if he could so we might have an opportunity to consider them. Perhaps the Minister could return to us with some examples so that we might fully understand the practical implications.
It would not be appropriate for me to give the names of pension schemes. There are pension schemes the rules of which require alterations to be registered when, in fact, it is not possible for such alterations to be registered. This amendment is to guarantee that such rule changes are valid. It is a simple and straightforward point. It has been recommended by the Pensions Board and I am certain it does not waste its time recommending changes in legislation for frivolous reasons.
We are not looking for personal details or names. We are looking for practical examples of the operation of this section without the details.
Is it being sorted out by allowing them to be registered or allowing them to be legalised in their own right?
I will start again and explain from the beginning what is proposed. The amendment is a technical measure in relation to certain schemes which are registered as perpetual funds. Section 61 of the Pensions Act provides that certain sections of the Perpetual Funds (Registration) Act, 1933, shall not apply to pension schemes.
Section 7 of the 1933 Act provides that no alteration in the rules of a perpetual registered fund shall be valid or have any force or effect unless or until such alteration is registered in the register of perpetual funds. This section in particular is considered inconvenient by registered pension funds as most pension schemes are amended on a retrospective basis, whereas the registrar took the view that section 7 of the 1933 Act did not permit him to register retrospective amendments. This is the main reason section 7 and other sections which have supplementary provisions were not applied in the case of pension schemes already referred to in detail by Deputy Woods.
However, the existing wording of section 61, while it solves this problem for any scheme which merely registered as perpetual funds, some schemes provided in their own rules that no alteration in these rules would be valid or have effect until such time as the alteration was registered by the registrar. It is arguable, therefore, that in some cases a "catch 22" exists where a separate provision in the rules of the scheme says that rules cannot be changed unless the alteration is registered with the registrar although registration under section 7 is no longer possible as provided for in section 61.
This amendment seeks to put the validity of any amendments to the rules of schemes described above beyond any doubt. The proposed amendment came specifically from the Pensions Board's legislation committee. It asked that this be done on foot of advice from its own legal adviser. The amendment is necessary to avoid any ambiguity or complications with regard to changes a pension scheme might make in these circumstances.
Will there be returns at the end of the year on how pension funds are performing? Many people ask questions about the financial state of companies, such as life assurance companies, which are involved. On 31 March each year will there be an onus on the company to inform its policy holders of how it is performing? I understand that, depending on the type of policy involved, the Minister will not be able to regulate with regard to financial returns. I ask that from now on full explanations be given to all pension holders who take out policies as to whether their pensions are guaranteed, subject to gilt or equity market trends or dependent on a subvention from the company. These are important matters. Some people are of the opinion that when they enter private pension arrangements with insurance companies, these pensions are guaranteed. However, the fine print of some of these arrangements outline that they are subject to certain rules and regulations.
I have allowed the Deputy to make his point, even though it is not relevant to the amendment.
It could be relevant.
In a roundabout way.
That is a matter of opinion.
The Chair's opinion is the one which counts.
It is at the end of the day but ultimately votes count. We asked the Minister what kind of alterations he is talking about. Deputy Connolly talked about the fine print and whether there is reporting of changes at the end of the year. He talked about other changes but it also applies to these. Must retrospective changes in rules automatically be notified at the end of the year to scheme members? If so, what will be the procedure?
What kind of alterations has the legislation committee of the Pensions Board suggested? The members of the board have experience in the pensions business and are aware of the alterations which arise. We agree with the Minister that alterations arise but we want him to outline them without necessarily identifying schemes by name. I presume the Minister has the report of the Pensions Board. This surely outlines the problems which arise and which justify changes.
Deputy Connolly raised the important issues of the fine print and the importance of properly informing scheme members of changes so that there will not be any sleight of hand or uisce fé thalamh. What information has the Minister received about the kinds of alterations which occur? When will members be informed of changes? Will they be notified at the end of each year?
Deputy Joe Walsh made the point that the industry has strong representation on the Pensions Board and is concerned about this. One of his amendments seeks to broaden the representation of the board to include consumer interests. Even though the Minister has appointed people to the board in an attempt to make it more broadly based, it is very technical and efficient in a technical sense. This is why we ask the Minister to outline the practical changes he is talking about. We also want to know when members will be notified of changes so that they will know fully what is happening and that there will be nothing in the fine print of which they are not aware.
In my younger days I was involved in the insurance industry so I know something about it. At that time pension funds were only in their infancy. My interpretation is that a company may, only out of good will, produce a return of how it is operating. At the end of the year a plc is duty bound to give an overall return. Shareholders at meetings of publicly quoted companies can ask questions about this. We must be crystal clear with the public and, above all, with pension holders. If there is not a statutory instrument in place, companies are under no obligation to produce returns. Under the Consumer Credit Bill, banks and other financial institutions must, from 13 May, spell out in complete detail the terms of loans they grant to individuals and companies. I would not be happy unless there was a statutory instrument in place obliging companies to inform policy holders of alterations.
I would not be happy unless there was a statutory instrument obliging companies to inform policy holders of alterations in age, occupation or otherwise. That includes outlining in great detail what is hazardous and what may and may not be covered or may result in a curtailment of the pension policy. In order to be transparent policy holders and those currently taking out a pension policy, must be informed of what they will receive as a lump sum and what their monthly or weekly pension shall be. This must be spelled out clearly and that can only be done by an amendment to the Bill providing that the company involved, at the end of each financial year, shall give notification of alterations in policies that will affect individuals or members of a pension scheme. I hope I have made my point on this issue clear.
Young people are nowadays more likely to join pension schemes. Companies, as can be seen from the major insurance companies' returns, have made a big onslaught on that market. There is great competition to sell policies. It must be clear to the policy holder what he or she will get and, above all, it must be spelled out that there is no penalty involved. If there is a penalty it should be in bold type on the policy, not hidden on a back page in print one could only read through a microscope. That is not feasible.
It should also be clearly spelled out that when a person joins a pension fund he will have 14 days to revoke the policy if it does not meet his needs. That is the case with other financial transactions and I welcome that. Our party, when it was in office with the Labour Party, ensured that development in the financial sector and I want to see it continued. There is highly competitive marketing in the insurance industry and the concerns I have outlined should be spelled out clearly. This is a most important issue.
The Deputy's remarks are most interesting but they have no relevance to the amendment. I agree there should be full information. The Pensions Act and existing regulations provide for what the Deputy is seeking. It is obvious he has not addressed the question of pensions for the 30 years he has been out of the business. The Pensions Board has set up an information committee to monitor and address the practice of the pension industry in providing information.
This amendment is a tidying up amendment. It is recommended by the legislation committee of the Pensions Board to deal with an anomaly arising from section 61 of the 1990 Act. It has no impact on members of schemes other than to guarantee that any changes agreed by the scheme are valid. This amendment is being proposed to protect members of a scheme. I urge the committee to accept it.
Will notification be given of any alteration in a pension holder's pension and will the company be obliged to give such notification by law? I believe it should. After all, subscribers are paying into such schemes. The amendment states:
The validity or effect of any alteration in the rules of a scheme shall not be affected by the failure to register such alteration in the Register of Perpetual Funds notwithstanding any provision in the rules of the scheme requiring such registration.
I am trying to ensure this legislation is not flawed and the person who is paying into the fund will be notified at the end of each financial year of any alteration in the scheme. People are entitled to such notification.
What the Deputy is saying has nothing to do with the amendment before the committee. Perhaps he would read the Act his colleague, Deputy Woods, introduced in 1990. He will find all the protections to which he refers in that Act.
This amendment seeks to guarantee the validity of any changes a scheme might make which currently has within its rules an obligation to register when it is not possible for them to legally register. It is not possible for a scheme to retrospectively change rules which would decrease the benefits available to members of the scheme. They can only retrospectively change rules which would increase the benefits to members of the scheme. There is no issue here. The Opposition either supports this amendment, which seeks to protect the members of a scheme, or it does not.
I am raising a simple point.
Unfortunately it is not related to this amendment.
Is a person entitled to be notified if a policy is altered?
Are they notified?
Yes. It is stipulated under the 1990 Act.
If I had been given that information earlier, there would not have been a problem.
The Minister was asked to provide examples in relation to this provision. We would also like to be given more information and have our spokesperson, who is particularly interested in this and other sections of the Bill, present for the debate. For these reasons we oppose the amendment.
I will endeavour to obtain the required specific information for Report Stage. I remind Deputy Woods that the sitting time for today's meeting was unanimously agreed by the committee last night.
The Minister made a comment with regard to Report Stage and we have often co-operated with Ministers in relation to similar proposals in that regard. However, strict procedures are laid down regarding the debate on Report Stage which do not permit the exchange of information or clarification of issues which occur on Committee Stage. That is why we are reluctant to accept the Minister's offer to return with the information on Report Stage, particularly in the absence of our spokesperson on social welfare. The Minister sought to be assisted through the timing of the meeting and his demand won out over the legitimate entitlements of our spokesperson on social welfare. That is where the breakdown occurred.
The main Opposition spokesperson should be present to participate in the debate on upcoming sections and amendments. If he was, he might quickly accept amendments, new sections, etc. However, our spokesperson has been disregarded. To suggest that the committee unanimously accepted the timing of this meeting does not reflect last night's events. The position is that the main Opposition party sought to have this meeting next week. The earlier part of next week was discussed as acceptable to allow the business of the committee to be so ordered. We recognised that the Minister could not be present at such a meeting but pointed out that a Minister of State might be able to attend and complete the consideration of the Bill.
I accept the Minister's statement that he was not aware of planned events in the diary of the Minister of State next week. That information could have been obtained in the intervening period. However, we have not yet been informed at to whether the Minister of State might be available next week.
It is regrettable that the main Opposition party are not able to seriously address this Bill. Yesterday, the committee made a decision to resume discussion on Committee Stage following the presentation by the Blood Transfusion Service Board. The Chairman pointed out it was not possible to change that timetable without a decision by the committee. I indicated I would be unavailable to attend a meeting of the committee next week and that it was necessary to complete consideration of the Bill as soon as possible. I was asked if I would be available today and indicated that, as far as I could recall, I would not.
The committee then adjourned for 30 minutes and I discovered I could rearrange a number of engagements planned for today and did so. I met Deputy Flood in the corridor and informed him I had rearranged my plans for today and would have 90 minutes available to deal with the Bill. He told me that was fine and that we would sort it out when we returned to the committee. When we returned to the meeting, Deputy Joe Walsh indicated he could not be present today but was satisfied that Deputy Woods could act in his stead.
At that point, Deputy Woods objected and challenged a vote on the matter of today's sitting. The amendment he tabled was defeated and the committee unanimously agreed the sitting time for this meeting. This matter is a puff of smoke. I regret the fact that members of the main Opposition party are of the opinion that they can play political games with this Bill because it is so unimportant. It is regrettable and I do not understand the kind of mentality which addresses a serious matter such as consideration of the Pensions Bill in this way.
The Minister correctly stated that he met me in the corridor but he should understand that, at the meeting yesterday afternoon, I suggested it might be helpful if we considered the possibility of meeting this morning. I made this suggestion despite the fact that the committee had already ordered business for this morning with regard to receiving two important deputations.
At the meeting yesterday afternoon, the Minister indicated he would not be available today. Consequently, I notified our spokesperson that the Minister would not be available. Deputy Joe Walsh then informed me he would not be available today. It was only when the Minister met me in the corridor he informed me he had been able to rearrange the engagements in his diary. The problem occurred when the determination of a time for this meeting was completed informally but that is not the way to order the business of this committee. As the Minister stated, we are dealing with important legislation.
Each Deputy has been given latitude to explain his position. Last night and this morning, a total of 20 minutes was spent discussing this matter. The committee made a decision to proceed with the consideration of the Bill today and we should do so.
I have no objection in that regard. However, the Minister intervened when the Chairman was about to put the question.
I gave the Minister latitude to intervene. He had not previously intervened on this subject while other Deputies had, and maybe I gave them too much latitude in that regard. Everyone has made his position clear on this issue. I ask that Members address their attention to the amendment because there is no point in repeating what was stated last night and earlier today.
The Minister stated he would provide further information before Report Stage. I stated that we will oppose the amendment and await the information to which the Minister referred. I understood that the question would then be put to a vote but the Minister made a political statement. The main politics arose last night when the Government side forced the committee——
I again appeal to the Deputy on this issue. He has been given ample time to state his case.
As I stated earlier, this is being done under protest. The matter has been discussed at reasonable length.
More than reasonable.
I suggest that the question be put and we will await the clarifications which the Minister promised to provide to Deputy Connolly.
Browne, John (Carlow-Kilkenny).
De Rossa, Proinsias.