Róisín Shortall (Dublin North West, Labour)

I was speaking about the cost of the self-administered pension schemes, of which there are 6,500 involving hundreds of millions of euro, which neither the budget nor the supplementary budget have touched. Not only are people able to get tax relief on earnings of €5.5 million but when they retire they can take €1.3 million out tax free. That is an outrageous situation for the Minister to tolerate. It is quite incredible, given that she is due to bring proposals before the House soon on a pensions framework White Paper, that she is not in a position to say how much that tax relief costs. This is not a matter for the Revenue Commissioners alone or for the Department of Finance. The Minister is responsible for pensions policy and she should know how much that element of our pensions costs. These are some of the richest people in the country receiving the most generous tax reliefs available and the Minister does not know how much they cost. The Minister would want to do her sums. If she is close to bringing proposals to the House she had better be able at least to tell us how much the most generous aspect of the existing pensions policy costs taxpayers. I hope she will find out because it is a considerable sum and there is no justification on any grounds for providing that kind of cash transfer to some of the richest people in the country. It is corporate welfare and, as the Minister responsible, she should be on top of that.

My second point concerns the Robins case. The Commissioner requested the Minister to provide information on the action she was taking on foot of that judgment. The Commission was not satisfied with the Minister's response and asked her to provide further information. They are querying her lack of activity following that judgment. One of the most baffling aspects of this is that when this matter was raised publicly in the media by the Unite trade union in respect of Waterford Crystal workers, not only did they express their concern about it, but they actually came to the Minister, Deputy Mary Hanafin, and the Minister for Finance, Deputy Brian Lenihan, with a solution. That solution was a win-win situation for the State and everybody concerned, whereby the existing funds of approximately €125 million would be put at the State's disposal to assist in recapitalising a particular financial institution. It would have gone a long way towards doing that. What they wanted was a guaranteed return on that. There is already a guaranteed return of 8% for capital in those circumstance and they wanted that to go up to 9% or 10%. That would have solved the problem for Waterford Crystal's pensioners at no cost to the State. The solution was put to the Minister but for some unknown reason she rejected it.

In the context of what we might be facing into arising from the Robins case, there is an onus on the Minister to explain why she rejected that solution. The approach taken in that solution has the potential for expansion on a far wider basis. For example, we talked earlier about the State annuities scheme. Has the Minister considered nationalising the defined benefits schemes? Hundreds of millions of euro are available there. The Government is seeking capital to put into our banks, so why can those two things not be married? Why can there not be an arrangement whereby the schemes are nationalised, their funds used to capitalise the banks, and the Minister guarantees the return on that? In that way, one could deal with the huge problem of underfunding in large numbers of defined benefit schemes. At the same time one would have a ready source of capital with a reasonable return required on that to enable what one is proposing to do concerning the banks. There is huge potential there for some creative thinking based on the kind of plan the Waterford Crystal people came up with. The Minister should kindly tell us why she is not doing the obvious in that regard.

What will the impact of these proposals be on existing pensioners in insolvent schemes, and where companies are insolvent? What are the implications of these for existing pensioners? Will these provisions apply retrospectively to those pensioners who have retired with the valid expectation that they would continue to get cost of living increases? The terms and conditions under which they were granted a pension were that they would get cost of living increases, so what legal advice has the Minister taken in that regard?

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