Bernard Durkan (Kildare North, Fine Gael) | Oireachtas source

I want to mention pension lump sums and anticipation on the part of the contributors. In a different incarnation I was Minister of State at the Department of Social Welfare and had responsibility for dealing with the fallout in respect of cases where anticipated gains from lump sums did not materialise. What I want to mention and for everybody dealing with this issue to keep in mind is that very often people run into difficult times in mid-life during their careers.

They may struggle greatly to continue to meet contributions and, in some cases, may have spent the lump sum or part thereof in the run-up to their retirement, for whatever reason. I can recall vividly several cases involving people who found themselves in desperate situations having been told they were going to inherit an asset at whatever age they retired but it suddenly transpired it was not there. It was a fresh air shot and it does not work. I would advise serious caution in dealing with that area. I already mentioned dealing with the confusion.

I refer to defined benefits and defined contributions. I have had many struggles through the years with regard to those schemes. People were being sold products on the market in the belief that a sum would accrue to them at age 65 or whatever the case may be. These were Government-introduced stabilisers, for want of a better word, that prevented the people from getting access to what they considered to be their full entitlement, leading to serious anger, annoyance and disappointment, usually among people who were at an age when they could ill-cater for it or deal with it. Some cases ended tragically. To what extent have our guests pondered these issues and their potential to make life very difficult for the pensioners who have worked all their lives? I refer to the principle of these people having worked all their lives. They will say readily they have done so, made significant sacrifices and done everything they were asked to do but, at the end of the day, the only thing coming to them is a punishment, as they see it. That is a dangerous place to go. Politically, it is a very dangerous place to go. Have our guests considered those issues and their implications for the workforce? I am not talking about millionaires; I am talking about people who make a contribution and have a contributory pension.

Incidentally, going back to when I was Minister of State, there was a situation relating to the ordinary social welfare pension at the time whereby those who did not have an average of more than 22 contributions per annum over their working life did not qualify for a contributory pension at all. My view at the time was that was unconstitutional. The system indicates there has to be a break-off point. There may well have to be a break-off point but it has to be on a sound constitutional basis and that was not the case. We changed that and introduced a system that was proportionate to the contributions. That is a principle that would stand up in any court and should be borne in mind in the context of all pensions handled by the State.