Seán Fleming (Laois-Offaly, Fianna Fail)

We agree with this. Up to now under this formula there was not an exact link, but generally the rate of increase of the old age pension matched increases in standards of living in society which were generally not too far removed from increases in public sector pay. I do not know whether anyone has figures on this, but generally we have tried to look after people on the State pension as other pensioners and they would have benefited. The point I am making is a small technical one. Under this arrangement over a 20 year period if the contributory State pension increases more than inflation - which we would all hope it would and people have a real increase in their pension - but the pension of people under this scheme will be based on their contributions, we could find that ten years into payment the actual pension would reduce because it is linked to twice the amount of the State pension. It is very important that in the first year of their pension people will have a real pension with a certain amount of money, but if the State pension increases over the next ten or 20 years from then we want to ensure a commensurate increase under this arrangement, particularly for people who were on low pay so their pension is not reduced as a percentage.

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