Timmy Dooley (Clare, Fianna Fail) | Oireachtas source

I welcome the opportunity to debate this issue. As Deputy Eoghan Murphy said, it must be debated much more. This legislation is certainly too little and certainly too late. It is too late for those who were part of a defined benefit scheme that closed in the past two years and impacted on deferred pensioners and those working who will find themselves with no pensions when they retire. For that reason, I am disappointed that there is not some measure in it to try to deal with this issue retrospectively. I accept that it is difficult to craft legislation that deals with issues retrospectively. However, the property rights attached to pensions should be afforded some protection for those concerned.

Historically, people who paid into a pension fund had a legitimate expectation to receive certain payments which have been seriously impacted on by the economic crisis. The legislation does not address this issue. Will the Minister address it through some other means at a later stage? There is a cultural aspect to all of this. The Irish have, by their nature, tended to live for today. The concept of saving for retirement was not as strong as it was in other countries. Successive Governments failed in their duty in that regard and did not encourage the development of appropriate pension plans.

I accept that the buy-to-let market is a particular overhang in the economy and banking sector. Most of those involved in it were either self-employed or might not have worked for a multinational or the State sector but who bought property to secure a dignified retirement pension. They are often demonised in the analysis of the economic crisis which suggests it was all about profiteering, speculation and greed. I am not suggesting that was not a feature of what happened during the boom. However, many people of whom I am aware spent everything they had on educating their children as they could not avail of college grants or other State supports. They saw an opportunity in the relatively cheap availability of money to purchase a buy-to-let property, pay down the mortgage during their working lives, while the rental income would have provided them with support in retirement.

That is shattered for many of those people. Of course I am not suggesting that this Bill should address that, but I would like to put on the record an understanding of the culture or the concept of providing for retirement. That is certainly gone as a practice, even though the property sector is probably a good investment based on the yields from rent at the moment and it is probably a good system of providing for pensions right now. Unfortunately, the financial institutions are once bitten, twice shy. They are not in the business of looking at buy-to-let investments at all at the moment, notwithstanding the value that is there.

My other concern with the Bill is the lack of a retrospective component that would have dealt with those who have suffered the disbandment of the pension fund in the past number of years. A going concern should not be permitted to be wound up unless the defined benefit pension scheme has reached a minimum of 90% funding. The OECD set that out very clearly. By not having that provision included in the legislation, there is almost an encouragement for private pension schemes to go ahead and wind up the scheme rather than trying to manage it where there is still a level of profitability in the company. By not addressing that, the Minister may be encouraging the winding up of some of the defined benefit schemes unnecessarily. That would be a regrettable situation.

I think this is a start, although it does not go far enough. We need to continue in this House, through legislation, education and information, to try to develop a culture in Irish society of providing for one's retirement. We have seen where our own economy is at. We have seen the pressure in the cost of the operation of the Department, in particular the pension component of the Department. That is very significant, notwithstanding the fact that people seem to think we are sending more money to some eastern European countries to fund children's allowance and other schemes, when in fact our pension commitment is one of the largest components of the Department. The IPSOS/MRBI survey published in The Irish Timeson Saturday was quite enlightening. I thought it was ironic that it was published in a newspaper. Many sections of the media tend to over-emphasise the relatively small elements of the social welfare budget and the spending of this House as being the root cause of all our problems. There was some surprise in media circles that the public were so misguided, as evidenced by the survey, so I thought there was an irony in that when certain sections of the media spend a lot of time jumping on popular and populist platforms that seek to demonise the work of this House, public servants, politicians and so on.

I hope the Minister can address some of the issues I raised, perhaps in future legislation. She has plenty work to do in continuing a campaign of educating Irish people on this. Perhaps it might be factored into the syllabus in our education system so we can instill in the minds of young people that their first wage packet is not just about providing for today, tomorrow or the end of the next pay cycle, and that a significant component of it should be based on providing for the retirement period of one's life. Recognising the advances in health care, we are living longer than we did in the past. As a result, we have pushed out retirement age. There is a level of elasticity that we cannot go beyond, but if the advances in medicine continue, people will still live longer but may not be able to work longer. For that reason, I can see Deputy Murphy's point that this potential crisis will be with us long after we resolve our current economic situation.

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