Averil Power (Fianna Fail)
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I thank each of those who spoke and presented to the committee this morning. It is evident from the last speaker how much anger there is about changes that have been made. I suppose when any change is being made to people's long-standing entitlements, there needs to be a sense of fairness and respect for legitimate expectation. I guess the difficulty in this area is that there is a dramatic change in the number of those who are working and those who are drawing down benefits. As was said earlier, it has moved from a position where there were six working for every one person drawing down the pension and, by 2050, there will be two for every person drawing down the pension. I suppose we all have to be clear around this table on putting in place the right strategies for the future.

I understand that those who will now not qualify for the transitional State pension or State pension as early as expected can avail of a jobseeker's payment. Dr. Quinn pointed out in her presentation the arrangements that apply. The individuals will not be subject to the same activation measures as others. However, what arrangement will apply to somebody who is not required to retire at 65 but who has an option to do so under his or her contract? One might retire voluntarily at 65 having always believed one would do so. Is a person in such circumstances automatically able to transfer to a jobseeker's payment? Will he or she be affected by the usual rules applying to jobseekers, which stipulate one is not paid for the first few weeks? Will one be able to proceed to the jobseeker's payment only if one is required to retire at the age in question? I am not sure. I was asked a question about this last week and would like to have the matter clarified.

It would be remiss of me in the week that is in it and given the announcement of the Aer Lingus strike yesterday not to raise the issues associated with the entitlements of staff who have paid into pension schemes in the expectation that they would be able to draw down benefits at the relevant time and that their employer would continue to honour the contractual rights. One of the most significant issues that was missed and which we have been discussing today concerns the changes that have been made in the pensions legislation that was before the Oireachtas before Christmas. We raised at the time the fact that the Bill was silent on circumstances where there is not a double insolvency. The legislation was very clear about what happens when there is a double insolvency - when both the scheme and employer are insolvent – but was silent on circumstances where a scheme is insolvent and the employer is still making a profit. Many schemes are insolvent at present given what has happened in the financial markets in recent years. The OECD is very clear on this and has made a recommendation that there should be a minimum amount of funding, in the order of 90%, in place before a scheme can be closed where a company is still in a healthy financial position, yet that was not provided for in the legislation. We are seeing the result of this in the Aer Lingus context. Staff are fighting and there is considerable angst over whether an employer who is financially viable would be able to walk away from a scheme and leave employees without entitlements that they paid for and always expected to be in place. The Bill did not address that. Are there measures afoot to deal with these kinds of circumstances and to ensure we are living up to the OECD's recommendation in that respect?

A key aspect of pension planning was to involve the putting in place of an auto-enrolment scheme for all workers so they would all be enrolled automatically in a scheme from the earliest age possible and thereafter make contributions along with the employer and State, depending on their earnings. The employee might make a small contribution initially but at least he or she would begin saving at the earliest possible age. Unfortunately, what happens is that most of us do not think about pensions until we are in our 40s, at which time we must invest a huge amount of income to try to build up a private pension.

When the arrangement was announced by the last Government, in 2010, the intention was that it would be put in place in 2014. With the economic crisis, the decision was wisely postponed so as not to place an additional burden on employees and employers. What is the current position? Has a timescale been set? The Minister for Social Protection indicated last year that it is still the Government's intention to have such a scheme but she did not give a timescale. What is the current thinking? The scheme should not be put off endlessly and we should be clear on when it will kick in.