Brian Cowen (Laois-Offaly, Fianna Fail)

On the last question, I have accommodated that aspect on the basis that the amount will stay in the product for at least a year. The idea behind this measure was to move the money into a pension product. If one is already a pensioner, one has to make some arrangement that shows the bona fide nature of the operation, rather than simply move to take out a new product tomorrow with the benefit that I suggested in the scheme. Therefore, it was a reasonable interpretation by Revenue of what would be required for those who had reached pension age on maturation of the SSIA amount.

On the wider question of voluntary versus mandatory provision and rates at which reliefs should be available etc, a Green Paper on pensions policy is being progressed by my colleague, the Minister for Social and Family Affairs, which he hopes to publish in the coming months. That should provide everyone with the opportunity to respond within a framework to address the pensions agenda over the longer term as a policy issue.

In regard to Deputy Ó Caoláin's question, I come at this issue from a slightly different position. It is important that if people wish to make private pension provision, they should be enabled to do so. I have limited the amount by which they can benefit as a result of changes I brought into the Finance Act. They are not retrospective because that is not a principle of law I would apply. However, there are notional values I included at 3% annually in the event of moneys not being taken out which attract liability.

I introduced significant changes to deal with the matters that were arising. I take a different view from Deputy Ó Caoláin who would wish to tax everything according as it is earned, and redistribute such funds on the basis of a State pension. I do not take a statist view to that extent held by the Deputy. A State pension should be available on the basis of social insurance contributions made throughout the working life of individuals.

The Deputy's point on longevity and the low interest rate environment in which we now live in terms of a greater return on investments and pension funds require us to look afresh at the way we can incentivise people over and above what their social insurance contribution might be to give them a basic pension, albeit rising. We must consider the extent to which we can allow them to have supplementary pension provision so that they can live not only with basic dignities but perhaps also in some comfort as they face into the older years of their life. That people are living longer clearly has an impact in terms of the ability of the State to take on that responsibility on its own in the absence of equitable provision for private pension policy provision for those who want it. If people are earning money which they do not want wish to spend now, they should be given the opportunity——

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