Éamon Ó Cuív (Galway West, Fianna Fail) | Oireachtas source

Was due consideration given to the model that the witness intimated was available in other European countries, where what one got was pay-related, with a basic state pension and a pay-related top up on that funded by the state through the state system and through contribution there? Were comparisons carried out between that method of funding - which presumably is on a pay-as-you-go basis - and what is being proposed? Will ICTU provide statistics on the real return from pension funds? For example, when I started working I was getting £16 a week. If I had been putting 10% of the income in, it would have been £1.60; there will be a bit of inflation for conversion to euro. In real terms, taking inflation into account, it would not be much good to me today. Are there figures on the average real return, net of inflation, in other words, buying ability with money, on pension funds over 30 or 40 years?

We live on a small island; a vast sum of money belonging to the taxpayer is going to be handed over to these private funds. Does ICTU have statistics on the Irish pension case as to how much of that is invested on the island to regenerate our island? A mega amount of money is being handed out. How much of that is actually retained when they invest in gilts? They then invest in bonds at the end. My understanding is that towards the end, in the last ten years of one's pension, the pension fund managers get conservative and put them into German bonds. They will not even put them into Irish bonds, which would give a better yield, because they do not trust the Irish State. We are giving people State Irish money and they will not put it back into our own State. Are there any figures on that and the drain out of our economy of all this money and the effect that is going to have? That is something we have to take into account.

Is the CPA going to insist on ethical investments? Are investments in fossil fuels going to be allowed? Are we going to follow the European codology where there was a taxonomy and then suddenly they decided that natural gas was part of the taxonomy? If one invested in natural gas, it was considered a renewable fuel. These are all serious questions. The biggest question before we get down to the nitty gritty of this is return. The great thing about pay-as-you-go, as in the present system, is that the people paying their PRSI today pay in today to the pensioners today. We are all paying in the real value of the same money. When the person who is paying in now becomes a pensioner, they pay in at the value of today for the pensions coming out. Generally speaking, the State pension has proven more resilient to inflationary impacts. In fact, as our economy has grown, it has grown disproportionately. Is ICTU concerned about what happened in pension funds at the end of the early 2000s, from 2008 to 2010? People thought they had bought into defined benefits and there was a whole movement to try to change them all into defined contribution, ex post facto, 20 years on. There is that kind of uncertainty in the private pension industry; it is just a commercial industry, it wants to get the money because that is what it lives off. I am concerned about the history of pensions in Ireland. Our workers did not get out what they thought, in lots of cases, they were paying into. Is ICTU absolutely wedded to this private pension scheme with a mega amount of money?

I have a technical question I cannot get an answer to from the State for some reason. Normally, if one is earning a salary and one takes out €100 and puts it in a pension fund, then there is tax relief at the marginal rate. As well at the 30% going in from the State, is there going to be tax relief on that money? The Department of Finance has said that it has not made a final decision - I asked a parliamentary question about that. Has it clarified to ICTU what it would not clarify to me, that there will definitely not be any tax relief on this? That raises another question: has there been confirmation from the Department of Social Protection that, in various means tests and schemes, it will discount one's investment in this scheme as regards means testing and not consider it as income? I thank the witnesses for coming before the committee and for their presentation.