Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

The pensions raid was one of the most daring political strokes I have experienced. As Deputy Donnelly said, it was akin to taking money out of people's private savings. That is, essentially, what it was. When it was introduced in 2011, I feared it would not end after four years but, thankfully, it will end after five years. However, it has done enormous damage. It has resulted in approximately €2.3 billion being taken out of the private pension savings of our Irish citizens and it will continue to result in reduced pension benefits being paid for thousands of existing pensioners and current workers, who will depend on a pension income stream in the future.

One of the most amazing aspects of it was that it applied equally to schemes which were already under the water. Many of the defined benefit pension schemes are in serious deficit and workers were having to come around to the inescapable conclusion that their pensions would not be anything near what they were originally expecting but now they are going to have even less of a pension because of direct intervention by the State.

This was an extraordinary policy decision by Government. It ran contrary to the stated policy objective of successive Governments in respect of pension provision whereby people were encouraged to save for their future retirement, to invest in their pension schemes and to get tax relief on the pension contributions they made. It did enormous damage to the pensions industry. The dye has been cast and it will be 0.15% next year. I am glad the Government has committed to finally abolishing it at the end of 2015. I hope this time the promise will be kept.

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