Aengus Ó Snodaigh (Dublin South Central, Sinn Fein) | Oireachtas source

I am speaking to it. We are discussing amendments Nos. 5 to 10, inclusive, and amendments Nos. 7 and 9 refer to deferred members. Such members should be granted increased prominence in the priority order. I am setting out the context in which deferred members should be granted such increased prominence. In her e-mail the woman to whom I refer also states:

I have not tried to screw the country. I have worked hard all my life and I am continuing to pay my own way in a low-paid job with little or no pension because of years employed, although I am still funding this miserly pension.

I am not going to read all of the other e-mails I received. I will merely inform the Minister that those who wrote them are seeking to ensure they will have a right of audience when decisions are being made in the distribution of assets of defined benefit schemes in the event that such schemes are wound up.

In the context of wind-ups, I have major issues with the Minister's proposed order of priority. I am not opposed to it because it is better than that which obtains under the current system whereby existing pensioners, regardless of the incomes they are receiving - some of them are on gilt-edged pensions of over €100,000 - take precedence over those who might have 40 or 45 years service and who might end up with nothing in such circumstances. There is still this possibility under the model put forward by the Minister.

I hounded the Minister for a number of weeks to publish the review of pension scheme wind-up priorities she had commissioned from Mercer. The review is specific to the issue under discussion, but it had never been published. It is a pity it had not previously been available to members because since its publication - I thank the Minister for circulating it on Friday last - it has allowed us to compare the new scheme with the existing one. The latter is the case, despite the fact that Mercer did not review what was before it, rather it examined different options. The option the Minister has put forward is quite close to one contained in the review. This shows that there is some logic behind the moves she is making. It is evident from the review that, in the context of the wind-up priorities she has chosen, she has shied away from the original proposals she made, either last year or the year before, to the effect that what would be introduced would be fairer. Under the new scheme, some high-end pensions could continue to be protected and, despite having paid in for a number of years, some deferred and existing members could be left with very little.

The Mercer review explores and simulates the outworkings of a range of hypothetical priority orders for two sample schemes. The various priority orders fall into two categories, namely, a percentage plus a monetary cap and a floor plus a percentage, such that whatever happens there would be a minimum amount plus a percentage. In my amendments I have put forward a model more akin to having a floor plus a percentage and a monetary cap. This is to ensure every member of a scheme would benefit to the fullest extent. The inclusion of a floor would ensure a minimum amount would be secured for all of those involved - existing pensioners, deferred members and existing members - and the cap would ensure active and deferred members would not be excluded from an earlier consideration in the distribution of assets. I am seeking, therefore, to bring the latter into the priority order at an earlier stage. With the inclusion of a cap, I am trying to avoid the shortcomings of the first option considered by Mercer for more mature schemes. In the absence of a cap, a fund would run out of money before those who had yet to reach retirement age were considered. The cap the Minister and others have proposed would be too high.

It can be inferred from the report's findings that my proposals would give greater protection to those on low pensions and those with low pension expectations than either what was proposed by the Minister in 2011 or what is in front of us today. By relying solely on a floor and percentage and by failing to insert a cap on the distribution of pension funds in the first round of priority, the Minister risks leaving the active and deferred members with very little or nothing, no matter how close to retirement they may be. This would particularly be the case with mature schemes.

The report points out that some members of pension schemes are not entitled to the State retirement pension, especially those in employment that is or was linked to the public service. Those members rely entirely on their scheme for their retirement income and therefore, any change considered to the priority order needs to have particular regard to their circumstances. This Bill, as drafted by the Minister, pays no regard to their circumstances whereas my proposal does. In the wind-up distribution order that I have put forward, first priority goes to the purchase of the requisite social insurance record for those who are not eligible for the State pension so that, at the very minimum, everybody in a defined benefit pension scheme would get the State contributory pension. That is a good advance on what the Minister has proposed and would involve a cost to the pension fund rather than to the State. The fund would be buying contributions for those scheme members who had no contributions or an insufficient number to qualify for the pension.

I have tabled a number of amendments which outline how my party believes the scheme should work. The first priority is the purchase of PRSI contributions. The second priority is to ensure that all pensioners receive €12,000 per annum. Given that we have already guaranteed that all members would have a State contributory pension, then existing pensioners would have the equivalent of approximately €24,000 per annum, through a combination of the State pension and the scheme pension payment of €12,000. Many people in defined benefit schemes could take comfort from the fact that at the very least, they will have some income in retirement and would not end up, having paid into a scheme for years, dependent solely on the State non-contributory pension in their retirement.

The priority order then goes back and forth between the pensioners and existing and deferred scheme members, at a different rate to that suggested by the Minister. Our amendments also ensure that those whose pensions are on the higher end would not get 100% of their entitlements to the detriment of other scheme members. The first port of call is to ensure a minimum standard for all pensioners as well existing and deferred scheme members.