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

There is much in this proposal to be looked at. We were given to understand at the previous meeting that there was a different approach taken in some of the European countries, specifically the Nordic countries, to the idea of ensuring a pay-related pension for when one retires, and that it was much more state-based than the private sector model we are proposing. What examination has taken place in relation to the approach in non-common law countries - the European countries - as opposed to looking to Britain or even to America or wherever? We have a tendency always to look to Britain, and that is fair enough.

It is our nearest neighbour from which we inherited much of our approach to law, but we are always boasting about our membership of the EU and new things it has brought us. How much investigation has there been of alternative models rather than the very private sector-based model we are going for?

The second issue raised by Deputy Ó Cathasaigh was one I raised the previous day and involves investment in ethical funds. What happens if it does not give us as good a fiduciary return as investing in fossil fuels, for example? We then have the definition of an ethical fund. I think Mr. Duggan pointed to that. We found that natural gas is included in the taxonomy. Who is going to define what an ethical fund is? Will it be somebody out there or the Irish State?

Mr. Duggan said we cannot tell them where to invest because there might be better returns abroad. Two issues arise there. Looking at Ireland Inc., by investing money in Ireland, one would hope to develop our economy and maybe put a lot of Irish-owned investment into wind energy off the coast. That is a very simple example that will take billions of equity. Not only are we getting the straight return on the fund, we will get the economic generator return from the fund, which will increase people's income, meaning the fund will be bigger anyway. That is one we need to tease out better because it is not as simple as I get "X% here and Y% there.

I accept that risk is an issue. One of the reasons I like the PAYE approach for State funds is because we saw during the downturn how big an issue risk can be with investment in equities or other investments. My understanding is that when people get to a certain age, say within ten years of pension age, the funds are normally transferred out of the higher risk investments such as equities into bonds. One of the ironies in this country is that most pension funds in this State invest in German bonds. I defy anybody to say that investing in Irish State bonds is a risk. The chance of the Irish Government reneging on bonds has proven not to be true. It caused a lot of debate but the Government held firm that your word was your bond - literally. This was the right decision. I do not see a risk in Irish bonds. They give a better yield normally compared with German bonds. Again, one must question the wisdom of the Irish State pumping so much money into German bonds. I would like Mr. Duggan's take on that.

My understanding is that, regarding State investment in cash, the employee puts in €3 and the State puts in €1. Is that correct?