Joan Burton (Dublin West, Labour)

It is regrettable that, although the Government has talked a lot about pension reform, it remains the case that pension products in Ireland cost considerably more than those in comparable jurisdictions. We have some of the highest service costs associated with pension products and many people have lost money recently because much of their pensions are invested in equities. At the moment they find the thought of buying an annuity very difficult. In Ireland, saving for a pension has become completely confused with trying to play the market. There is a need for a national pensions scheme which is about saving for pensions, probably with some relationship to the purchase of gilts, Government bonds and so on. Although market investment managers will say the market always beats any other index over the long term, in recent times that has proven not to be the case. This is a particular problem for people in their early 50s who have less than ten years to go to retirement. It is also a problem for many in the public service, who were heavily advised to purchase AVCs, although they obviously did not have to buy annuities with them.

We need comprehensive pensions. If people wish to play the stock market they can do so, but if they are saving for their retirement and wish to have an income to support them in their retirement, we must distinguish between these two activities. We should make provision for both, by all means, but really concentrate on the core need for people to save for pensions which will give them reasonable support in their retirement. That should be the key element of Government policy.

On a related point, private providers of services should not be allowed to charge excessively. In other jurisdictions the cost of such services is not so high. I do not want to reopen an earlier debate, but the Government has concentrated on providing tax reliefs as an incentive and, because the tax reliefs have been so generous, the costs charged by providers have been at the higher end of the scale according to any of the comparative surveys we have seen. Thus, the taxpayer pays for the tax breaks-----

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