Willie O'Dea (Limerick City, Fianna Fail) | Oireachtas source

I thank Ms Murphy for her presentation and I commend the people who compiled the report. Obviously it is a large and comprehensive report, but it is a worrying one in some respects. I want to look at the context against which the report has been presented.

We are dealing with a situation where pension schemes have suffered horrendous losses, regardless of whether they are defined contribution or defined benefit schemes. In many cases, they have been very badly managed. Practically every defined benefit scheme in the country is underwater, yet the committee stated: "A member of a defined contribution scheme with a final pension fund of €400,000 could lose up to 15% or €60,000 on charges. [That is not the best of it.] An individual with a final pension fund of €400,000 could lose up to 30% or €120,000". According to the speaking note, there are two types of charge, the ones that are up front and those which are hidden. In the context of a business that has already been fleeced by charges and is also underwater financially, why should there be hidden charges? Surely, one would expect all charges to be out in the open at this time, especially given the context in which we are speaking.

The committee that put the report together appears to have been concentrating on achieving transparency in the hope that if people knew what was happening, what other people were charging and so forth, it would encourage competition and thereby drive down prices. I will make two comments in that regard. First, I realise this is just a report of the recommendations, but much of the content of the recommendations is about monitoring, developing approaches and schemes, reviewing, conducting further research and so forth. There is a glaring lack of urgency, even though we are dealing with an urgent and critical issue. Second, are we not considering the possibility of not only bringing all these charges into the open but also of imposing some limits on the amount people can charge for managing pension funds? We should be examining that aspect.

There are a few other matters that worry me, for example, the reference to the great solution or the white knight to come to the rescue, that is, the auto-enrolment scheme. Frankly, we are light years away from an auto-enrolment scheme. Look at the current situation and the reports from organisations such as the Irish League of Credit Unions which show that people have approximately €50 in disposable cash left each month after paying their bills. One could enrol any number of people onto the auto-enrolment scheme, but they would all opt out again simply because they would not be able to live. In view of the broad economic position, anything that takes more money out of the economy at this stage will be a non-runner.

Obviously, there is a great deal of work to be done in this regard. However, my focus would be on getting everything out in the open in simple and easy to understand terminology and, second, imposing some limits on the amount people can charge for their services. Some of these services have not performed too well, judging by the results.