Seán Fleming (Laois-Offaly, Fianna Fail)

I understand it cannot go down but over a period of between 30 and 50 years one could be left behind so we must work on that. I suggest some hybrid but I have no wish to defeat the purpose of the Bill by having a hybrid too much in favour one way or the other. At the end of the lifetime of the scheme, perhaps in 40 years time, it is expected that the new scheme will reduce annual expenditure on pensions by 35% or €1.8 billion. That is the long-term projection. It is a cut of one third. We are saying to people who are used to a pension that it will not affect them but it will affect other people in future. On average, their pension will be one third less than what it would have been otherwise. It is difficult to see where these figures are coming from. Someone must have produced a report but I guarantee the House that if one asked ten other consultants to produce the same report one would have ten different answers. No one can see into the future or the long-term. It is not too many years since we set up the National Pensions Reserve Fund. The Minister at the time, Mr. McCreevy, set it up and 1% of GDP was put into the National Pension Reserve Fund and it was to be there for us all. I recall the discussions in this House to the effect that come 2025, a large fund would be in place but most of it is gone already. Events overtake people's intentions. We must come back to the issue of the consumer price index, CPI, linkage.

The Houses of the Oireachtas produced a Bill digest last night, a comprehensive document containing a summary of the Bill. There are many fine charts in it but, in truth, I have not had time to digest it because it only came out last night. It is available in the House today. I refer to the chart on page 15 of the document. People are put in bands ranging from €20,000 to €170,000 although there cannot be too many on €170,000. The chart suggests that people on €45,000, a figure mentioned in several contexts, will not see any change. There is a chart projecting the single pension scheme assuming a 1% real wage growth each year and comparing it to the current pension scheme. It shows the differences that would occur in terms of pensions. Most of the people on €50,000 would get 93% of their pension, the people on €100,000 would get 90% of their pension and the people on €170,000, the highest figure, would get 89.58%. I did not have time to study the comprehensive document that came out last night but, if I read the chart correctly, it appears to suggest a 10% reduction in the pension for those on the highest payroll based on these assumptions but no reduction for people under €45,000. We agree with this because people on low salaries such as those on €45,000 deserve it. Let us consider a couple in receipt of the State pension to begin with as well as various entitlements. They would get at least €20,000. The average net income of a low waged public servant is not a great deal better than what the State pension would have been. Such a person would not get significantly more for having done 40 years work. It is only right that people at the low level of pension entitlements would not be hit because otherwise they could ask what was the point of working for the pension and, if they had not worked at all, they would have received the old age pension which was close in amount.

The chart appears to say that much of the reduction for the people on the higher level will be of the order of a maximum of 10%. I cannot square that. I call on the Minister to explain how that reconciles with the statement in the briefing note we received from the Department suggesting this would result in savings of 35% in pension funds. There are many documents to be examined and perhaps I am not reading the charts properly but this is my initial assessment. I cannot see from where the savings of one third will come.

If the Minister is to achieve savings of one third he should provide the numbers. What are the approximate salary scales of people in the public service? I suppose we could get the information by parliamentary question and it is on the record as well. How many people earn under €40,000, €50,000 or €60,000? Let us suppose there were no reduction for people who earn between €45,000 and €50,000. That is a large number or coterie of individuals in the public service. It means those at the higher end would necessarily suffer a reduction in pension of 50% if we were to get an overall saving of 35%, especially if others were giving no savings.

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