I might remind the Minister of some of The Workers' Party reservations with what we perceive to be the inadequacies of this Bill. For example, with regard to trustees, the provisions of section 34 enable the trustees of an occupational pensions scheme to transfer payments without the consent of a member. This provision confuses me somewhat. Would the Minister explain what circumstances he envisages could give rise to such action or why a member's consent would not be sought in the first place? For example, the National Pensions Board did not recommend that trustees should have power to effect transfers rather than preserve benefits without the members concerned being approached.
Many employees and some employers have abused pensions schemes and negotiated their terms for short-term financial gain. Employers have often deployed the provisons of a pensions scheme as a means of enticing workers to leave their employment, usually by boosting redundancy payments as an incentive to workers to leave their employment by way of deals negotiated in respect of redundancy. We must recognise that that is not the main purpose of a pensions scheme — they are not intended to be savings schemes for employees or lump sums that can be negotiated when some employees are made redundant. In addition, some employees have used their pensions scheme membership to negotiate a short-term savings scheme, yielding a lump sum, rather than its being used as a long-term provision designed to yield pensions and other benefits on death or retirement.
The provisions of this Bill improve that position somewhat. I should like the Minister to address the matter as it pertains to a country like ours, suffering so much from emigration and long-term unemployment. What facility would exist for emigrants making a claim under this Bill? While it is accepted that the object of pension schemes is primarily to accrue a pension, in many cases the viability of schemes is often dependent on a properly constructed long-term investment plan of a member's contributions. Can the Minister envisage any case for workers seeking refunds of their contributions, for example, where they are relatively new, short-term members of the scheme who wish to emigrate or where the worker is relatively young and, through ill health or other factors, may never be employed again?
As this debate continues, it will be brought to our attention that a number of established procedures will be shaken — for example, the rights of individuals on leaving their employment to cash in their savings through the pension scheme. Obviously many workers would be anxious to retain this right if they should lose their jobs, if they leave to seek employment elsewhere or if they wish to emigrate. These people might wish to capitalise on the savings already accruing on their behalf.
I accept that pensions schemes are not savings schemes but I would like the Minister to address on Committee Stage the opportunities for access by workers to the money in the pension schemes to which they have made an input. I have in mind particularly relatively young people who would not be very long in the pension scheme and where the sum of money would not be great. It is hard to tell a young worker who has served five or six years in an industry and who wishes to emigrate that his pension will be there for him at the age of 60 or 65 if he should return from the United States, Canada or South Africa. In many cases people regard their pension as a lump sum to be used when they wish to emigrate or if they become unemployed and have mortgages. Many of these people consider this sum as being relatively large but in the context of the overall pension scheme it is relatively insignificant. There are great pressures on these individuals to get the lump sum, which has been the tradition to date. It will be very difficult for people to recognise that this practice is on the way out. I would ask the Minister to consider providing facilities for people to cash in their savings in the pensions scheme.
Under the qualifying service section, the Minister has provided that a person must have five years service before he can qualify for preservation and that two of these years must fall after the commencement date of this legislation. However, the National Pensions Board recommended that five years service be required of members under 25 years at the time of leaving and that this be reduced by one year for each year over that age, subject to a minimum of two years qualifying service. This would make a significant difference for anyone over the age of 25 years. Perhaps the Minister would address this question on Committee Stage. As I said the last day, I am working mainly from the recommendations of the National Pensions Board which, in many cases, are preferable to the watered down provisions incorporated in the Bill.
It is regrettable that the preservation and revaluation provisions will not apply from a current date to entitlements arising from service prior to this legislation becoming effective. The National Pensions Board suggested a short lead-in period for the change, with no attempt at retrospection. The Bill lays down a much longer lead-in period which is inappropriate and unacceptable. The original formula of the National Pensions Board should be used. The majority of pensions schemes are financially healthy and it would cause no problems if we were to allow for a shorter lead-in period.
The section dealing with equal treatment is a major disappointment because it provides for only the minimum requirements of the European Community Directive on equal treatment in occupational schemes. The main weaknesses are in the areas of exemptions and enforcement. The Bill fails to achieve progress in its approach to the removal of discrimination between men and women. Comprehensive recommendations made in the latest report of the National Pensions Board have been ignored. The Minister, for his own reasons, has decided to make changes that barely comply with the EC Directive on equal treatment. One of the major debates on this Bill will centre around the whole question of equal treatment for men and women.
This Bill shows all the hallmarks of being substantially watered down by lobbying and pressure, not just from the pensions industry but from employer interests. Pensions schemes can continue to impose different pension ages for men and women, widowers will not have to be provided for on the same basis as widows and different benefits can be provided for men and women. This may be justified on actuarial grounds, for example, that women live longer than men or that one sex suffers more illnesses than the other.
I will comment on specific sections of the Bill. In regard to the actuarial factor, section 67 (1) (a) allows different contribution levels for male and female members of pensions schemes, to the extent that the difference is justified on actuarial grounds — this must be repealed by 30 July 1999 but it was the view of the National Pensions Board and the Irish Congress of Trade Unions that such an exemption should not be availed of. In practice, few if any pension schemes in Ireland require members to pay different contributions because of their sex.
Section 67 (1) (c) allows for different retirement ages for men and women. This exemption was seen as unnecessary in view of the widespread harmonisation of pension ages in this country and the fact that social welfare pensions are paid already to both men and women at the same age. Section 67 (1) (e) allows different treatment for a deceased member's surviving spouse or other dependants. This is unacceptable in view of the fact that such differences are already seen as being unwarranted and are being removed in certain areas. The Minister has produced a Bill that not only flies in the face of the recommendations of the Government-appointed National Pensions Board, but proposes to allow differences in contribution levels between men and women to remain up until 1999, provided they are based on actuarial data. I would argue that each of these exclusions is in conflict with the broad principle of non-discrimination laid down in Article 119 of the Treaty of Rome and runs the risk of being challenged under this Article.
We wish to see further debate in these areas as the Bill progresses. In the light of our reservations, the Minister will be aware that we will be bringing forward amendments on Committee Stage to strengthen the Bill. However, I would have to agree that the Pensions Bill, 1990 is welcome and is long overdue. The Bill implements many important recommendations of the National Pensions Board and indeed satisfies several longstanding trade union demands in the area of pension reform. However, it was disappointing in certain respects, particularly with regard to member trusteeships and equal treatment for men and women. During my previous contribution I went into detail on the member trusteeship so I will not repeat myself.
I will summarise now what The Workers' Party see as the main weaknesses of the Bill. First, there is a very low trade union representation on the proposed new pensions board. Seven out of the eight members will represent employers, the pension professionals and the ministerial nominees. Second, very low fines will be imposed for pensions offences and we believe these will not act as a serious deterrent for serious offenders. Third, the question of preserving pensions will apply only to benefit built up after the time the legislation becomes effective and after the person has five years qualifying service in the scheme. We think this weakness should be corrected and it does not conform with the recommendations of the National Pensions Board. We are concerned also that contributions refunds, where still payable, will not attract interest. We also note the registration of pension schemes will not be linked to the actuarial certificates submitted to the new pensions board and will, therefore, not necessarily facilitate approved supervision of schemes.
We are also concerned that self-investment and the concentration of investment are not restricted even for the purpose of certifying minimum funding standards. We have reservations about the precise disclosure arrangements which will be governed by regulation. The Minister has the power to restrict the categories of persons who receive information, the amount of information provided and whether it is supplied automatically or on request. Some schemes may also be exempted from disclosure requirements on the grounds of size.
The member trusteeship as recommended by a substantial majority of the National Pensions Board has not been introduced. The equal treatment directive has been implemented in a minimalist manner with all possible exemptions and exclusions being availed of, in particular, different retirement ages. Different benefits for survivors and even different member's contributions levels are permitted which are contrary to the recommendations of the National Pensions Board. All pension disputes concerning equal treatment for men and women are to be dealt with by the pensions board in future rather than by the existing equality enforcement machinery, such as equality officers and the Labour Court as heretofore. This will be further removed from the normal industrial relations arena and I argue that quite possibly it will have adverse consequences. There is no provision for compensation, except in dismissal cases, where employers are found guilty of, and employees have suffered from sex discrimination in regard to pensions.
They are the litany of points that we would like the Minister to address before the Bill comes back on Committee Stage. I look forward to the continuing debate.