Seán Fleming (Laois-Offaly, Fianna Fail)

I move amendment No. 14:

In page 23, after line 45, to insert the following:

"(10) Scheme members shall be entitled to purchase years of notional service and the Minister shall publish purchase tables and the rate of contribution for notional service before the enactment of this Act.".

The Minister of State will appreciate what I am proposing in this amendment. We raised this matter on Committee Stage, had a discussion on it and that is the reason I have tabled the amendment. The amendment proposes that scheme members or public servants who are part of a pension scheme shall be entitled to purchase years of notional service and the Minister shall publish purchase tables and the rate of contribution for notional service before the enactment of this Act. The Minister of State will appreciate that many people who have taken a career break may not have their full 40 years' service on reaching retirement, which was the requirement in the past prior to the new legislation being introduced. Teachers may have worked abroad or may have been late in entering the profession.

They may now only make up 30 years but they want to contribute in order to buy extra years to give them the equivalent of a full pension on retirement. They are forced to take out additional voluntary contributions purchased from private sector pension schemes and we all know how these have performed in recent times. Many of these pension schemes have invested abroad there has been a reduction in the returns.

Teachers have been concerned about this issue over a number of years. Like everyone who takes out an AVC, they note the commission charged by these companies means the full first year of contributions is to pay the commission charges. The companies take the 5% commission on the 20 years of the contribution in the first year. The value of the AVC fund after the first year or two might be in the negative because of the level of commission charged. Current public servants are outraged that if they decide to increase the value of their pension on retirement they must go to the private sector. Some companies provide special arrangements for different categories of public servants such as gardaí, teachers or nursing staff. Also, there is no security as to what they will receive and this is also the case for private sector employees. However, these workers are public servants. They are paid by the State and they ask why their contributions cannot be invested by the State over the period rather than the State handing that money over to the private sector on behalf of its employees who have paid for AVCs.

My amendment contains a reasonable request for the Minister to consider publishing the table so that people would know what they would have on retirement. I ask the Minister to outline the rate of contributions and the notional benefit to be received. It may not be incorporated in this legislation but in this day and age of the State's cash flow difficulties the cost of AVCs is being deducted from public servants' salary payments and is being handed over to private companies. I suggest it would be more sensible for the State to hold that money, put it to use during this difficult economic period and pay the person the contribution on retirement. I suggest that the State should be the beneficiary of the contributions in the short term. The process of augmenting pensions has been privatised.

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