Joan Burton (Dublin West, Labour) | Oireachtas source

Members had a lengthy discussion of this issue in the debate on an earlier amendment. First, the Department of Social Protection probably has the most extensive consultation process of almost any Department. It could be argued at times that things might move a lot faster, were the Department to adopt the practices of other Government agencies by having limited consultation. People from the Irish Senior Citizens' Parliament, who were very welcome, were present for the entirety of the morning's proceedings. In addition, I am unsure whether Deputy Shortall is aware of this, but the Department meets representatives of the Irish Senior Citizens' Parliament pretty constantly. They are included as a matter of course in everything the Department organises in respect of pensions, including the extensive stakeholders' consultation that was undertaken at length with regard to this Bill.

There is no denying that this is difficult legislation. It is probable that no one present would ever have wished to have such legislation considered. In the case of defined benefit schemes in the past, people simply did not live for as long, financial markets were far more stable and buying bonds and annuities was a far easier prospect. However, all these things have changed in recent years. Some have changed for the better, such as the increase in longevity. However, I am happy to inform the Deputy that representatives of the Irish Senior Citizens' Parliament and of other pensioners were involved in all the stakeholder consultations, which were very detailed, on this Bill. The Mercer study was commissioned and the information and scenario-setting that is set out in the Mercer report formed the basis for much of the discussions that took place at the consultations, a number of which I attended in part. I am happy to confirm the people about whom the Deputy spoke were involved. Moreover, my senior officials next week are meeting, as is regular, the secretary of the Irish Senior Citizens' Parliament to discuss in detail the parliament's ongoing issues.

However, if we are to have a situation in which the interests of active and deferred members also are taken into account, one must carry out such a rebalancing in an appropriate way. I explained earlier that the figure of €12,000 was selected. Figures within the industry had recommended a much lower floor - I believe €6,000 was the figure most frequently suggested - but some suggestions were radically lower than that again. The median pension to pensioners in defined benefit schemes is €11,000 and the figure of €12,000 is above that. Consequently, it means that people on the median pension are fully protected by the floor. In addition, people in defined benefit schemes in the private sector almost all have an entitlement to a State retirement pension, which brings values of a further €12,000, which for most people brings the package up to €24,000. I had to hand a table in earlier discussions regarding people in the semi-State sector, who of course have been on a different rate of PRSI. I refer, for instance, to people in the ESB scheme. Incidentally, years ago, it was the case that people working in semi-State organisations, their representatives and the companies concerned did not particularly wish to be in the PRSI structure and this only changed after 1995. However, for people paying class D contributions, in the case of those earning up to €1,443 per week, the weekly PRSI contribution by the individual and the employer is 0.9% and 2.35%, respectively, giving a PRSI combined contribution of 3.25% per week. As the full contributions are of 4% and 10.75%, respectively, or 14.75% in total, one is comparing contributions of 3.25% with contributions of 14.75%.

However, as I am sure the Deputy is aware, what then happened in such schemes was that the pension on retirement was calculated having reference to an industrial pension in a private defined benefit scheme and then by reference to the calculation of what benefits would arise, had the employees been contributing to PRSI in full. In effect, this is the reason one often finds that pension entitlements in semi-State employments are significantly higher than those in equivalent private sector entities. People sometimes wrongly state they have much higher pensions because they think those individuals also might have the State retirement pension. However, unless they are post-1995 employees, by and large they do not because they, their representatives and the companies were happy to be in PRSI class D. Therefore, when one considers the €12,000 floor and the €12,000 State retirement pension, bringing it up to a total of €24,000, I decided on balance that this was a fair point, given that the average industrial wage in Ireland is somewhere between €34,000 and €36,000. In fact, if this rule applies to Sinn Féin Deputies and if what they state happens to their salaries applies-----