Barry Cowen (Laois-Offaly, Fianna Fail)

I acknowledge the fine work done by the former Deputy, the late Brian Lenihan, who created the Public Service Pensions (Single Scheme) and Remuneration Bill. Not only is this Bill in accordance with the EU-IMF programme of financial support for Ireland, it also has accounted for a sustainable plan that will be able to carry on into the future. When this Bill was previously discussed, many members of the current Government argued that it failed to address the issue of retrospectively affecting those in office. I am glad to see that as the Bill is before us, they acknowledge that this action is neither legally possible or plausible.

That said, it is important to note that the Bill aims to bring public service pension terms more into line with those which apply in the private sector, to link pension benefits more closely to average career earnings, to improve the efficiency of pension administration within the public service and to manage the growth of public expenditure on public service pensions over the longer term. Terms included in the Bill are a new minimum public service pension age of 66 years which will be linked henceforth to increases in the State pension age, a maximum retirement age of 70, and pension benefits to be based on career average earnings rather than on final salary. There will be a change in the overall rate of pension contributions from staff. The contributions will remain broadly as apply at present but will be higher for certain fast accrual occupations., modifying the earnings linking of pensions and the reduction but not the elimination of fast accrual terms. The new scheme acknowledges the special circumstances for the President, Oireachtas Members, the Judiciary, the Attorney General and others who earn accelerated pension benefits at present by providing for a doubled rate of accrual together with a doubled rate of contribution for all new entrants to the offices.

Apart from the special cases mentioned above, the terms of the new single scheme apply equally to all public servants. There are no special terms of any kind for new entrants appointed to senior positions in the Civil Service or public service. The career average system applies in the same way no matter what the grade. New entrants under the scheme will be subject to the pension levy.

As the Minister, Deputy Howlin, lauded the Bill as placing this country at the forefront of public service pension reform in Europe, his Government simultaneously began raiding pension funds in Ireland against the advice of officials. The pension levy is discriminatory, inequitable and socially divisive. Older people are hit hardest. The IMF has expressed reservations about the behavioural impact of the levy. There are fears it will not be temporary. The levy bears no relation to ability to pay. Some pension schemes may opt to locate offshore, leading to a flight of assets. The Government has not properly engaged with the pensions industry, nor has it published its impact assessment. The Minister for Finance had no communication whatsoever with the Pensions Board before making the decision.

A question was put to the Taoiseach some weeks ago by Deputy McDonald of Sinn Féin. She commented on the fact that the Taoiseach had signed off on substantial severance pay and conditions for a retiring senior civil servant. The Taoiseach reminded the House that the same conditions of severance pay applied during the previous Administration. However, when he was asked later in the day about the appointment of a replacement, he did not give the same answer. The same pay and conditions and severance agreement applied to the new appointee as to the one who had just left. He said he was hamstrung by the fact that an agreement was in place since 1987 over which he had no jurisdiction and there was nothing he could do about it. It was strange that he could not give that answer earlier in the day. I wonder why that was the case. Was it because the Press Gallery was full at that time and it was not later in the day? It is only right and proper that I ask the Minister, Deputy Howlin, representing the Government, that the inaccuracy be corrected either by him on behalf of the Government or by the Taoiseach. It is only right, proper and fair that the distinction is made and the fallacy is put to rest. It may have been the populist thing to say at the time but to think that the Taoiseach came back to the House a few hours later and had something completely different to say to the same question beggars belief.

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