Mr. Fergus Whelan:

I thank the Chairperson for the invitation to speak to the committee on this subject.
This decision to raise the pension age, we are informed, was agreed with the troika. There was no political debate, no public consultation and no cost-benefit analysis of the measure. There was no consideration given to the significant labour market issues involved. Neither was there thought given to issues of fair play, equity or minimising the hardship on those worst affected.
Citizens are being deprived of a benefit they earned and paid for. No information was given to the workers who are to lose €12,000, €24,000 or €36,000, in today's money and depending on their age. Almost 15% of salary was paid on behalf of these workers in pay related social insurance, PRSI, including the employer and employee contributions, throughout their working lives. Many of these workers also worked and paid taxes through all that time. They are now victims of a decision made by people who will suffer no loss but rather will continue to enjoy good pensions, at age 65 and younger. There is no equity or justice in this decision and it will be damaging to social cohesion in Ireland.
Apologists for this measure suggest that as people are living longer, it is desirable that they should work longer. Congress holds that people should be free to work longer if they wish but should not be obliged to work longer in order to avoid poverty. No provision has been made to facilitate workers remaining in employment after age 65. Congress asked the Department of Social Protection, which sponsored the legislation, if it would continue to terminate its employees at age 65 regardless of whether they qualify for a State pension, and we never got an answer to that question. Neither officials from the Department of Social Protection nor from the Department of Jobs, Enterprise and Innovation have given any signal to private sector employers whether to retain or dump their employees at 65 regardless of pension entitlement. This measure is not designed to help older workers to stay in employment. It is to deny them an entitlement.
Employers and unions were given no opportunity to consider the other complex labour market issues involved. IBEC was concerned that the lack of clarity concerning the legality or otherwise of sacking a person at 65 could lead to litigation. Congress was more concerned that a worker terminated with no State pension entitlement might picket his or her employer. Other labour market issue that were ignored included the effects on morale and productivity of workers either being retained in, or forced out of, employment against their will; the labour market rigidities involved in conferring rights on older workers to keep their jobs; whether a worker in the construction and related sectors can work safely at heights and in inclement conditions up to the age of 68; and the effect on youth unemployment and worker morale of older workers holding down positions which otherwise might provide opportunities for advancement.
Pension planning is a long-term discipline. It has been a long-standing public policy that citizens should plan their pension provision over the long term. These measures make nonsense of the advice of the Pensions Board on financial planning for retirement. Up until now, most occupational schemes were integrated with the social welfare system. One knew what one would get, one knew what one had to contribute and one knew what one's employer had to contribute to give one replacement income at age 65. In the case of some workers, this decision wipes away three years of that legitimate expectation and makes nonsense of the ability of anybody to plan for retirement. Making major pension changes in such an ad hocway is not only a cruel injustice to individual workers but a denial of the right of legitimate expectation. Long-term damage done will be done to pensions in general. Why would anyone agree to pay into a pension scheme, either public or private, if the rules can be changed at the eleventh hour to withdraw an entitlement already earned and paid for?
Congress accepts that the pension age will rise throughout Europe. However, Ireland is going further and faster in this regard than any other country in the EU. We believe that pension reform must be long-term and hurrying these measures without proper consideration or debate is wrong in principle and potentially disastrous in practice. These changes will not save the State much in the short to medium term but will impose severe financial hardship on individuals in the first three years in what should be best the best years of their retirement.
We asked the Government and its predecessor to postpone these changes and to increase the pension age in a fairer and more gradual way. Congress suggested that someone who reaches 65 this year could lose one month's pension entitlement, someone who reaches 65 next year could lose two months, etc. We could have reached the same end game but spread the pain much more fairly across the workforce. The lack of public debate on this issue has meant that so far, nobody has attempted to explain to the Irish public why we must have the highest pension age in Europe.
I want to say something about the principles of pension reform. Pension reform should be based on the following principles. Pension reform should be long term. It should not be hurried. It should do as little violence as possible to the right of legitimate expectation. Pension reform should, as much as possible, protect accrued benefits already earned and paid for. It should involve consultation with stakeholders so that related matters such as labour market policy issues can be considered in advance. Pension reform should be based on the principle of equity. Losses and hardship should not be imposed on certain categories of worker while elites remain immune. Pension reform should give workers and their employer sufficient time to adjust their expectations and financial plans.
The troika did not impose this measure. Long before the advent of the troika, successive reports, published by the well-pensioned elites, rehearsed spurious demographic and other arguments to attack the modest public pension provision of private sector workers. No doubt the troika demanded the raising of the pension age, but congress does not believe it would have been so prescriptive.
This is a Government decision. The decision to change the eligibility criteria to take €1,500 per annum from the pensions of those, mainly women workers, who spent some time out of the workforce was not the troika's either. That was a very Irish decision. There is something incongruous about politicians and public officials making decisions which hurt other citizens but in no way impact on their own comfortable arrangements.
A 59 year old private sector worker, who started work at 16 and who has had 15% of his or her income paid in PRSI since then, will lose circa €24,000, in other words, two years' pension. Such a person will now get his or her pension at age 67 after 51 years in work, assuming his or her employer does not sack him or her at 65 which the employer is entitled to do. In today's terms, using the average industrial wage as a benchmark, circa €362,000 in PRSI contributions would have been paid on the worker's behalf.
As I gave the committee this paper in advance and the next statement is not quite true, I want to withdraw it. I stated that any politician who went along with this measure, who is aged 59, will not be asked to wait till age 67 and then settle for a pension of €12,000 per annum but that is not quite true. For any veteran politicians here who were elected in the election before last, it is certainly true.
Congress challenged this measure to no avail last year. We have no expectation that the cosseted elite who brought this about will do anything to mitigate the injustice. This question will only be revisited when private sector workers who have been attacked by this measure wake up and realise what has been done to them.
When the committee was told earlier that those at 65 are already on some sort of pension entitlement since age 63, the question is not whether they are on an entitlement or not. The question is whether it is a means-tested entitlement. That is the crucial issue. It makes the injustice worse to say that only a small number of people will bear the brunt of this.