Willie O'Dea (Limerick City, Fianna Fail) | Oireachtas source

I thank the Ceann Comhairle for allowing me to raise this very important issue arising from the report on pensions the Government commissioned from the OECD. The OECD report reveals a very serious situation - a looming time bomb. As somebody said, the time bomb has been ticking for some time but the ticking is getting ever louder. I raise this issue to ascertain the Government's position on the matter, in so far as one can.

Currently, there are 5.3 people under pension age for one person over the age of 65. By the middle of the century, it is estimated that figure will decrease to two people under the age of 65 for every one person over the age of 65. The Minister will be aware that the reported highlighted that almost 50% of people between the ages of 20 and 60 have made no provision whatsoever for their pensions. The report recommended that the Government should make a definitive choice on the future structure of private pensions even if economic circumstances currently do not enable that to be put in place. The report gives a choice between a means tested pension or a basic pension for everybody. Has the Minister any views on that?

I recall when the then Government received the last report on pensions in 2010, it recommended a system of auto-enrolment where employers would pay a certain amount, the Government and taxpayers would put up a certain amount and the pensioner would contribute a certain amount. I think the proposal at the time was that everybody would be automatically put into the scheme but they would have the right to opt out.

This report takes a different view - perhaps it is right in principle - that the only way to make this sustainable is by compulsion, although I presume one starts at a very low level. It is a bit ironic that on the very day the OECD report was published, a report was published by an organisation called Amárach which stated that one in four people would be pushed into arrears with their bills if their income dropped by €50 per month. We are also aware of the much-quoted findings of the Irish League of Credit Unions that 1.8 million people have a disposable income of less than €50 per month. In those circumstances, it is utterly unrealistic to talk about compulsion at this point in time.

The report referred to the defined benefit pension schemes situation. The Minister will be aware that anything between 80% and 90% of defined benefit pension schemes are currently technically insolvent. I know it is the Government's intention in the pensions legislation, because it is has been said a number of times in this House, to change the priority in the event of the wind-up of a defined benefit scheme to make it more equitable than it is currently where the existing pensioners take everything to which they are entitled while the remainder goes to people who, in many cases, may have been contributing for decades.

There is a looming situation in Waterford Glass and the new provision the Government intends to make will not be made in time to save people who are currently paying pensions in Waterford Glass. I would like to hear the Minister's comments on that and on the recommendation in the report that defined contribution schemes should be better designed. Will the Minister facilitate a debate on the report?

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