Alan Kelly (Tipperary North, Labour) | Oireachtas source

I accept that there are many politically contentious issues in this Bill. This should not be one of them. We can talk about the bonus culture and other such matters, but this concerns issues related to people's pensions and workers. I would not accuse anyone in the House of not wanting to do the right thing. This section is about ensuring that everyone is protected and deals with a number of issues. The purpose of the section is to certify and put in place watertight consolidation to make sure everybody who has come into the utility is protected.

The purpose of section 9 is to provide for a number of technical amendments to superannuation provisions contained in the Water Services Act 2013 and the Gas Act 1976. It has been agreed that staff transferring to Irish Water will transfer with no less favourable pension terms. As we all know, this is a standard phrase. I was involved with a number of transfers within State bodies where I negotiated transfers and it is a phrase which has stood the test of time. The provisions regarding the superannuation in section 28 of the Water Services (No. 2) Act reflected the understanding that Irish Water would bear the liability of future pensions of staff transferred to Irish Water from my Department or local authorities, with deficits relating to past service to be met by the State or local authorities, through appropriate subvention.

Section 28 has not yet been commenced as Irish Water has concerns that the current wording would mean the financial liability for past service would be on the balance sheet of Irish Water, with local authorities or the State defraying the cost of paying the superannuation benefits. This would present a significant financial liability which could result in credit or funding issues for Irish Water, depending on how it played out.

For this reason, the amendments have been brought forward and we want to introduce them immediately before the section is commenced. Irish Water does not have financial liability for the pre-transfer service. It has been decided to provide for two separate pension schemes, one for Irish Water service which would be fully funded by Irish Water and would meet the required funding standards, and another for past service with local authorities of my Department which would be funded on a pay-as-you-go basis.

The new scheme to be established covers past service for local authority staff, which includes those from the Local Government Management Agency transferring to Irish Water following the termination of a service level agreement. This is provided for in section 19 of the Water Services (No. 2) Act 2013. It also includes local authority staff, including staff from the Local Government Management Agency or staff of the Department who, immediately before commencing employment with Irish Water, were employees of my Department or a local authority, and former local authority staff who resigned from the local authority and were employed by Bord Gáis and Ervia on an interim basis until such time as the Irish Water pension scheme was set up. Their contracts of employment include a commitment to transfer them to the Irish Water pension scheme on its establishment.

These amendments are necessary to clarify that Irish Water does not have the financial liability for past services of officers of the Minister or local authorities, other than the net effect of any increase in pensionable remuneration due to the actions of Irish Water. A separate scheme will now cover the past service of such employees and this will remain funded by the State. We are certifying what is necessary to clean up a number of technical points regarding pensions. The unions are privy to the ongoing discussions and will be anxious for these issues to be dealt with immediately.

I cannot recall which Deputy asked about secondment. All secondments are funded by the local authorities from which staff are seconded for the period of time involved.

There was some commentary on bonus payments. While that issue is not addressed in this section, it is important to say that I have been quite clear on this issue. I do not want and it is not my intention to see any form of bonus culture in Irish Water. I do not believe such practice is the best way to do things and it is not something I would have tolerated or established. I understand the process by which Irish Water was set up as a result of its parent, Bord Gáis Éireann.

Having said that, later in the Bill we will deal with issues regarding the board and its establishment, and I will be asking for support to increase the board numbers and bring in expertise, which I have said is necessary. The first task of the board will be to deal with this issue and examine the pay structure across the organisation in a reasonable way. We have to respect the fact that the unions have negotiated with Irish Water and we have to reflect on the fact that everybody who is working there has expectations. I have spoken to trade union officials who represent many of the workers. There is a way in which this can be dealt with reasonably. I will task the board, when it is constituted with new members and expertise, to deal with this issue.

I accept that, from the point of view of the public, the language, ideas and vision of people receiving bonuses and the way in which the system was constructed is worrying and concerns people. I can understand how that has emanated into a discourse of concern. It is an issue which will be dealt with it. I have spoken to the chair of Irish Water about it and I am quite confident it will be dealt with. In fact, it has to be dealt with as a matter of priority. It will form part of the discussions and negotiations which will be ongoing once the new board is constituted.

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