Clare Daly (Dublin North, United Left) | Oireachtas source

I wish to respond to remarks made by the Minister. I fully appreciate how my constituent feels and his desire to cease contributions to the scheme. I make contributions to the same scheme and am fully aware that at the moment it is a black hole for active members. It has been so mishandled to this point that at the moment we would not receive back what we have put in, never mind what the company put in.

The necessity of this legislation in allowing workers to cease contributions has not been explained. There is no reason a rule amendment could not be implemented using the existing structures of the Irish aviation superannuation scheme without legislative change. Legislation is not needed to allow workers cease their contributions.

The need for a freeze and de-risk strategy to save the scheme was raised by the Minister, Deputy Varadkar, as if this points the way forward in giving certainty to workers and pensioners. What sort of certainty does this provide? The only certainty facing pensioners at the moment is that they will be €40 per month worse off from January. If the freeze and de-risk strategy continues and the predicted returns ensue, pensions will be cut further. There is no fund to mitigate losses for pensioners and nothing to stop trustees from introducing further cuts, so I do not think this is the kind of certainty people need.

The Minister said certain investment decisions were made on the schemes to remove risk but the facts do not back this up. Serious analysis of the financial elements of this scheme is required. Some €667 million of equities were disposed of at a time when equity prices were rising and this is not a strategy to lower risk; it is lunacy. There was a prime property portfolio in Dublin that could not be acquired now, such was its value. It included properties such as the Passport Office on Molesworth Street. This property was sold at a very poor price for Aer Lingus shareholders, although it was great for those buying it. Those involved in buying the properties included organisations like Jones Lang LaSalle that operated as property advisers and selling agents to the IASS and gave valuations to buyers. Jones Lang LaSalle occupies offices that will be redeveloped in that building. Is this not strange?

The trustee who decided to shore up €1.4 billion of money belonging to pensioners from Aer Lingus, the DAA and other airport authorities in an Irish Life fixed income fund with a minuscule return worked in Irish Life for 30 years. Is this not strange? I find it strange because the average return on this is 1.27% per year and an annual management fee reduces this further. This has tied up pensioners' funds and contributed to a huge risk. Remaining assets have been invested in sovereign bonds and this is also a problem because the 15 year return on those is actually negative, that is to say, money is being lost on this investment. According to EU statements last week, interest rates will remain low for some years and this means bond returns will remain low too. Meanwhile commercial properties have risen in value and these have been divested. The freeze and de-risk strategy has accumulated massive losses that endanger the living standards of pensioners. It does not give certainty and nor does this Bill.

I think the issues I have raised are worthy of a separate investigation. People want to know whether the €800 million invested at Irish Life is insured and what return it got in 2013. Does the Department know the annual management fees on that fund? These issues are the real reason for the funding crisis. It was stated that the scheme was unsustainable but I do not believe this. I believe very poor decisions, especially those made by the two employers remaining in the scheme, have contributed to this problem. People were allowed to exit and this increased the strain, along with an insufficient employer contribution. The workers are paying the price.

The Minister said this legislation is required to allow those who are currently not in a pension scheme and are employed by the DAA and Shannon Airport to join a pension scheme. I do not think the legislation is necessary for that purpose. The Aer Lingus pension scheme for new employees involved the formation of a new company, Aer Lingus (Ireland), and the new employees are now members of a defined contribution scheme. The reason new staff in the airport authorities are not in a scheme is a decision was made not to allow them do so. There is no legislative impediment but a decision was made to deny them the benefits of a defined benefit scheme. They could, like Aer Lingus, set up a new scheme for new employees but what has this to do with existing members of the IASS? This amendment relates to members of the IASS. A new scheme could be set up for those who are not members of the IASS. Legislation allowing for a new DAA (Ireland) or SAA (Ireland) need not impact on the IASS.