Joan Collins (Dublin South Central, People Before Profit Alliance) | Oireachtas source

The Bill represents the minimum required to comply with the EU insolvency directive. While the Bill will provide some protection for members of defined benefit schemes restructured or wound up due to insolvency it will do so by reducing the benefits of the retired members. We face a wide variety of problems in pension provision. The State pension is not sufficient to meet the needs of retired persons particularly if they live alone. Many pensioners live in poverty or at risk of poverty.

As in every aspect of Irish society, huge inequality is built into the pension provision system. This exists because of the linking of pension entitlements to a percentage of earnings, which favours the higher paid and particularly the very highly paid, and the fact that tax exemptions for private pensions almost exclusively favour the well-off and are extremely expensive for the State. We have a serious mess in our pension funds. ESB workers are being forced to strike to defend their pension rights. Marks & Spencer workers have also balloted for strike action to defend their pension rights. We could also have strikes on this issue in Aer Lingus and the Dublin Airport Authority.

Active members in defined benefit schemes are being set up against retired and deferred members. Many workers now pay large amounts into the schemes with no clear idea as to what benefits they will receive when they retire. There is no requirement on employers to fund pension schemes to a level to ensure sufficient funds to meet the cost of the benefits promised. Insufficient regulation has allowed employers to wipe out pension promises at the stroke of a pen.

The protection offered in the Bill of 50% of expected benefits with a minimum of €12,000 will be challenged by those involved in cases before the courts such as the Waterford Crystal workers. I contacted Unite for a response on its concerns, if any, with the Bill. The actuarial adviser made the point that in the case of double insolvency the EU insolvency directive requires member states to ensure employees and former employees are protected. The Bill would provide protection of only 50% to a minimum of €12,000. This falls short of an ordinary interpretation of the word "protect" and inevitably it will be challenged by workers.

It is remarkable how differently a person is treated in Ireland as opposed to the UK in the case of double insolvency. Pensioners with an entitlement of €10,000 or equivalent in the UK would receive the full amount in Ireland and the UK. Those with a €20,000 entitlement or equivalent in the UK would receive €12,000 in Ireland but the full amount in the UK. Those with a €30,000 entitlement or the equivalent in the UK would receive €15,000 in Ireland but the full amount in the UK. This is a huge difference when one considers the economy and cost of living. Those not yet retired in Ireland with an entitlement of €10,000 could expect €5,000, but someone with an entitlement of £10,000 in the UK would receive £9,000; someone with entitlement of €20,000 would receive €10,000 while someone with an entitlement of £20,000 in the UK would receive £18,000; and someone with an entitlement of €30,000 would receive €15,000 while a worker in the UK with an entitlement of £30,000 would expect to receive £27,000. These are also large differences. The UK approach has been in place since 2005 and has not yet been challenged. As such it can be considered as meeting the requirements to protect employees and former employees. This is an important point and I would like to hear the Minister's response on this.

There is no need to have a three-tier pension system in the State. At present the State pension is paid for by stamps, the public service pension scheme awards scandalously huge pensions to an elite, and a private pensions industry benefits from expensive tax breaks amounting to €2.9 billion which favour the very well off, a point made by the previous speaker, Deputy Boyd Barrett. There could and should be universal pension provision based on the right to a decent standard of living, such as €25,000 a year, with employees and employers paying into a State scheme. Public sector pay should be capped at €100,000 a year and pensions at approximately €50,000 a year, although this could be discussed. All tax concessions for private pensions should be ended. In the longer term we should have a more affordable and fairer system than we do at present.

Many Deputies received an e-mail from the Irish Senior Citizens' Parliament highlighting concerns about the right of audience for pensioners in schemes. It states pensioners feel they were not consulted, and that some consultation took place several months ago but not on the legislation. Pensioners particularly want consultation on the restructuring of schemes and hope an amendment can be made to the legislation to allow a right of audience for pensioners in schemes.

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