Bernard Durkan (Kildare North, Fine Gael) | Oireachtas source

I am delighted to have an opportunity to speak on this Bill. Many problems have emerged over the last few years, some of which we anticipated and some of which we did not anticipate. We have all been talking about a pensions iceberg emerging in 2030 and 2038, and of course that is still the case. However, I am not as pessimistic as many people. I believe that there is still adequate space and scope, but at the same time, the Minister is taking an action that needed to be taken now. I sincerely hope that it does measure up to expectations. Of all the issues that have come up over the years since I became a Member of the House, I have dealt with this issue on numerous occasions. We could paper the walls with the pleas of people who have had sad experiences of being unable to fund a pension scheme of one kind or another, and finding out that they had to liquidate it two thirds into its lifespan, or even in a very short space of time which eventually leaves them in a difficult situation. This is particularly the case for people who thought they were putting something aside for their retirement, and who found out that they had to dip into their pension fund or capitalise the fund or draw it down at an earlier stage, with obvious consequences for themselves.

I have been concerned about the extent to which pension funds have been run in some of those situations. I am not entirely satisfied that the customer gets the best deal at all times. I believe that eventually, the compulsory pension scheme will be the right answer. There will be State intervention, regulation and prescription and as a result, a State guarantee of some sort at the end of the day. That is a good thing.

As we all know from our experiences in the past few years, financial services and pension funds have a certain amount of interdependency, which is fine. The only problem is that there is nothing like the anguish of people who have contributed to a pension fund, only to find at the end of the day that there is nothing in it, or something vastly short of their expectations. It is soul destroying for people. I know there were enhanced tax benefits available to them in recent years, and that probably was the wrong thing to do, because it encouraged people to go for bigger pots - a bigger pay out - and it also encouraged managers to go for more risky investments. We all know where that ended up eventually. That is the way things are. Deputy Dooley mentioned that some of it was greed. Let us be fair about it. We cannot blame people for tying to do the best they can to maximise to the greatest extent possible the benefit that might accrue from their pension contributions. They are obviously going to go for the best result, but going for the highest risk pension and the best result may not be the same thing.

That is why I believe this provision which the Minister has introduced is beneficial. It will give some consolation to people who, provided certain procedures are followed, would receive something at the end of the day.

We must completely move away from the idea that it will be all right eventually and we do not have too make provision for these things. As our society evolves it is more and more important that provision of this nature is made at an earlier stage than previously expected. What is happening in the health insurance market is frightening because younger people, due to economic difficulties, are opting out. That is creating an imbalance in the system and the result is that more people will be without cover and will have to pay for health care out of their own pockets or come under the State system, increasing the liability.

Deputy Dooley mentioned the possibility of changing the culture, and that must be done. The experiences of the past three or four years will go a long way towards changing the culture and how we Irish people look at many issues. It is recognised that what looks like the easy way is not necessarily the best way or the right way. I hope that from the sad lessons we have learned the proposals from the Minister will serve, at least for the foreseeable future, to address the issue in so far as it can be done and at least make some worthwhile provision for people who might otherwise be in a very difficult situation.

See this speech in context