Róisín Shortall (Dublin North West, Independent) | Oireachtas source

At the outset, I must say that it is very disappointing that this legislation is being rushed in this manner, without allowing adequate time for consultation with those who will be most affected by it or indeed, without allowing time for Members of this House to give the proposed legislation adequate consideration. It is no way to do business. Any respect due to this House is being completely ignored in terms of allowing sufficient time for debate on this.

It is also wholly inappropriate that we should be discussing the measures contained in this legislation in a policy vacuum. It is now several years since the famous Green Paper on pensions was published and there is a pass the parcel exercise going on between the Minister for Social Protection and the Minister for Finance. There is very little coherence in the Government's pension policy. Bits and pieces are being done on the hoof without any clear policy context.

This Bill proposes to allow for the reordering of the priorities in the event of the insolvency or restructuring of a defined benefit pension scheme. It also provides the Government's legislative response to the Waterford Crystal workers' situation by introducing minimum pension guarantees in certain circumstances where a double insolvency exists and I will say more about that later.

In principle, a reordering of the priority arrangements in the event of a pension fund wind up is most welcome. The current regime is entirely stacked against current workers and deferred members. We have all come across those awful cases in our constituencies of workers in their sixties losing out on their pension because the scheme has wound up and all of the proceeds have gone to the existing pensioners. The system, undoubtedly, must be made a whole lot fairer. That said, the Government has got the balance wrong with these proposals, on a number of levels.

First, with regard to the single insolvency situation, the absence of any provisions in the legislation to ensure that at least some of the deficit would remain a debt on the company is a major flaw in this legislation. This really is just another form of corporate welfare and yet another example of socialising private debt. The legislation places no onus on employers in a single insolvency situation to make any further funding available for the pension fund and offers no obstacle to employers who choose simply to walk away from their pension promises. Such a scenario is not, of course, permitted in the United Kingdom and one must ask why it is acceptable in this State. I wonder how taxpayers will feel when they realise that they are paying for this corporate welfare.

Second, the minimum guarantee in the single insolvency scenario is much too low. The legislation only guarantees an income of €12,000 for pensioners. What if this is the only income for a pensioner couple? It is completely inadequate. Indeed, the way the priority order is now drafted could mean extra costs for the State because pensioner couples reliant on the minimum guaranteed pension of €12,000 would probably be entitled to means-tested State benefits. Therefore, not only would a solvent employer have walked away with the State's blessing but taxpayers will have to fund higher social welfare payments as a result.

Third, there is not enough burden sharing among the higher-paid pensioners. The most a pensioner on over €60,000 stands to lose is 20%. The legislation should, of course, set down a maximum income limit on the guarantee. Under the Government's proposals, trustees can take money from a pensioner whose pension is very slightly in excess of the €12,000 threshold while still paying out a €100,000 pension to another member. That is simply inequitable in anybody's book.

Fourth, I welcome the fact the Government is finally legislating for the double insolvency situation. However, it is true to say that this would not be happening this year were it not for the tenacity and fortitude of former Waterford Crystal workers and the Unite trade union.

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