Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)

Tá sé tábhachtach go bhfuilimid ag labhairt ar an mBille seo inniu agus go bhfuilimid ag díriú isteach ar cheist mhór na bpinsean sa tír. Tá fadhb mhór ann, ní hamháin maidir leis na pinsin poiblí ach leis na pinsin príobháideacha chomh maith. Níl rudaí ceart mar atá siad rialaithe faoi láthair. Níl sé ceart cad atá ag tarlú. Tá deis againn deighleáil le ceist na bpinsean ina iomlán san mBille seo ar dtús ach tá súil agam, chomh maith, go bhfeicfimid Bille ón Aire Coimirce Sóisialaí amach anseo a dhéanfaidh deighleáil le ceist na bpinsean ina iomlán, mar níl an córas i gceart agus ní raibh le fada an lá. Tá a lán athraithe gur chóir dúinn díriú isteach orthu.

Many pension schemes are blighted by giant holes, particularly the private funds, but there is also an effect on the schemes of public or semi-State companies. That is leaving workers, especially those approaching retirement age, carrying a very heavy can. Yesterday, the Taoiseach indicated that the State has no role to play in filling holes which have emerged in these schemes. The State has a role to play and the Taoiseach's comments were a kick in the teeth to thousands of workers whose pensions, through no fault of their own, will be insufficient to sustain them in old age. At a minimum the Government should be taking steps to remove restrictions that are preventing Irish pension funds from addressing their deficits themselves, and that is one role the State has in filling the holes in these schemes.

It was reported over the weekend that An Post has a ballooning pension deficit of €800 million, and the fund is prevented to an extent from addressing that deficit by the current rules which exclude it from investing in Irish Government bonds which would pay higher interest rates than German Government bonds. If a change occurred, the Irish economy could be boosted in a patriotic act and worker pensions would also be protected.

There are two issues in this regard. Why is the Government still allowing the ratings agencies to dictate economic policy? At an EU and international level, steps must be taken to rid us of these odious companies and their activities. Pension fund trustees cannot invest in bonds deemed by these conflicted ratings agencies as junk. Some of these Irish Government bonds might be deemed as having junk status by the ratings agencies but these are the same bodies that gave the sub-prime mortgage products in this and other countries a AAA rating at one stage, and we all know what happened with that.

The ratings agencies are not impartial observers and are actually far from it. Last year a US Senate investigation committee hauled senior Goldman Sachs officials over the coals, and during the process it emerged that the ratings agency used to rate Goldman Sachs financial products was in fact hired by Goldman Sachs itself to do so. Where is the objectivity in that? This is the same Goldman Sachs to which the NTMA paid €7.8 million in taxpayers' money to advise on the recapitalisation of AIB and Bank of Ireland earlier this year. Anyone can see the conflict of interest as, on the one hand, these companies played no small role in destroying the global financial process, especially the Irish economy, while on the other hand, they are being paid by the Government to advise us on how to get out of this mess. That is a major problem.

Private pension funds represent untapped wealth that should be made available for targeted investment in Ireland's recovery. That is the public role for the Irish pension schemes. Currently, the Minister for Finance, Deputy Noonan, has a decreasing pot of money but Irish pension funds are investing in Germany or bailing out European pension funds. Those funds should be invested in Ireland. We urgently need to maximise investment in Ireland and at a minimum we must remove restrictions that are preventing funds from doing so. At this stage there is a patriotic duty in pension funds to invest in Ireland and a minimum percentage of Irish private pension funds should be compelled to be invested here. That would be a step in the right direction.

It would mean that Irish workers would see a benefit from their pension fund on their own doorstep. Pension deficits are a major problem and whether the Taoiseach wants to or not the Government must play some role in helping them to "fill the holes" to which he alluded yesterday.

I take this opportunity to urge the Minister for Social Protection, Deputy Burton, to meet the Communication Workers Union to discuss what can be done to address the considerable pension deficit in An Post - €800 million - in this instance, a semi-State company that was highlighted at the weekend.

I understand the Bill is tied to a promise made to the IMF and that it is connected to the economic crisis and specifically deals with public service pensions. I welcome the news that the Department of Social Protection is to investigate charges in the pension industry. Such an investigation is long overdue. I have long believed that charges in the industry are exceptionally high and it is vital that they are exposed, documented and reduced, thus saving money for pensioners. The Government should force some transparency around costs in the private pensions industry. Pension fund managers should be required to disclose all charges and fees. Moves must be made in that regard because otherwise the Government's entire pension policy is being developed in the dark. We do not know what the charges are and how much it is costing Irish pensioners.

The Pensions Board should collect data on charges but as it does not, currently there is dearth of information on Irish pension industry costs. That said, according to TCD academic, Mr. Jim Stewart, industry charges could be swallowing as much as 30% of a pensioner's lump sum. As was highlighted in a programme on RTE on Monday night; in some cases the smaller the pension the greater the proportion being swallowed by industry charges. That must be addressed in an overall pension package and whether it is done by means of amendment to the Bill before us or in a future Bill it is urgent that it would be done.

In the absence of legislative action by Government to protect pensioners, and more directly as a result of the legislative enabler for the pensions industry provided by the Government, the new 0.6% levy on private pension funds will in all likelihood be passed directly on to pensioners. If that is allowed to happen a pensioner with an annuity of €10,000, which is less than the State pension, could be down €900. I have discussed that with the Irish Senior Citizen's Parliament. There are significant fears that the levy will hit older people on low incomes hard. The Bill provides the Government with an opportunity to introduce an amendment that would have the effect of mandating the pensions industry to absorb the new levy from within its existing fees and charges. I urge the Government to use the opportunity to amend the Bill rather than wait for further legislation to be drawn up.

The pensions industry continues to claim that it cannot possibly absorb the cost of the new levy but must instead pass it on to pensioners. On the basis of studies on costs in Britain, that is simply an incredible claim. PRSAs are comparable to the British stakeholder product yet the costs associated with PRSAs are considerably higher. One has to ask whether the private pensions industry is really earning its cut. In recent years and up until last year the rate of return on private pension assets was 1%. One could get 3% if the money was invested in the post office. That shows private pensions are not all that they are made out to be and that perhaps many private pension fund managers are not earning their keep. Last year the rate of return was 11%, which was high, but even if the rate continued at half that level the industry could easily absorb the new levy. More action must be taken in that regard.

We need a complete overhaul of pensions policy. More radical reform of retirement income policy is badly needed. The favoured policy approach of the present Government and previous Governments is to subsidise private pension provision. The policy has abjectly failed: individuals who have paid into private pensions; the Exchequer which continues to forgo significant revenue via tax reliefs and; society generally because despite huge tax expenditures in the form of relief on pension contributions the vast majority of people continue to depend heavily on the State pension. The Government must learn lessons from this failure.

The National Pensions Framework promises to introduce auto-enrolment pensions with contributions collected by the PRSI system and then to be gifted as a wholly undeserved and reckless reward to the private pensions industry. In our view longer term reform of the Irish pension system should involve making the basic State pension universal and sufficient to provide a minimum income for all in old age. I wish to put other points on the record and I will do so on Committee Stage. I hope the minor changes I have suggested, especially on the levy, can be introduced as Committee Stage amendments to ensure some relief for people who are awaiting their pension in the near future.

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