Dáil debates

Thursday, 22 September 2022

Pensions (Amendment) (Transparency in Charges) Bill 2021: Second Stage [Private Members]


5:15 pm

Photo of Claire KerraneClaire Kerrane (Roscommon-Galway, Sinn Fein) | Oireachtas source

I welcome this legislation and commend Deputy Nash and the Labour Party for bringing it forward. It is a piece of legislation that Sinn Féin will support. This Bill has a simple objective and it is something that should be done. The Government should not be slow to intervene when it comes to retirement income and the protection of income after retirement. We have seen that all too often in the past. I am reminded of the defined benefit schemes which saw employers walking away and employees left high and dry. There was a lack of protections around those defined benefit schemes and the Government did not intervene.

As has been said more than once in this debate, pensions are a minefield. That in itself puts an awful lot of people off a private pension. Part of the problem is that people naturally ask themselves if a pension is worth it, how much money will they get at the end of it and what it is going to cost. If the answers to those questions are not clear at the start, more and more people who could do so will choose not to establish a private pension. That is a part of the problem when we look at the low level of coverage that exists. There is an over-reliance on the State pension for people in retirement.

Of course, when we speak in particular about private pensions, we must note that they are out of the reach of many workers in this State. That is particularly true of people of my generation who are struggling with high rents and struggling to put together a deposit for a home. Those costs mean it is difficult to put money aside for a pension. However, in respect of occupational pensions, in particular, where employees pay into a pension, we need far greater clarity and transparency.

Auto-enrolment is important to protect the pensions and incomes of workers on their retirement. It is also why getting auto-enrolment right is so important. We need to supplement people at their retirement and the State pension is not enough. Like the generation before us, many people in the years ahead will not be in a position to pay off their mortgages before they retire. With that in mind, the State pension will not be enough and a supplementary pension will be important. In 2018, I put together the Sinn Féin submission for the Strawman consultation on auto-enrolment. One of the key points we made at that time was the need for transparency around fees and charges. That will be key in auto-enrolment. It also needs to be embedded into the pension system across the board. I welcome what the Minister has said about auto-enrolment. We need that to be rolled out as quickly as possible.

On a wider note, we need greater transparency across the board. There have been a number of references to statements, including annual statements, being issued to people and the need for clarity in information. That is important. I welcome the Minister's press release this week which contained a commitment to ensuring the Government will provide PRSI statements relating to the State pension. That is very important because in many cases, people do not have the information. In some cases, people reach or get close to the State pension age and do not have enough contributions. By the time they realise that, it is too late. It is important that people have clarity around auto-enrolment and all other pensions, including the State pension.

As I have raised with the Minister before, we should be moving to the digital era and developing an application for pensions. I hope we will see that with auto-enrolment. To encourage people to remain in that scheme, they need an application on their phones. They need to be able to click in and see their pension pots growing. That will hopefully keep them within the scheme, especially when they are going to have many other costs. People will not always be able to find money easily to set aside. I hope that a State pension application will be considered so people can see what they are getting when they pay their PRSI. They can be notified through the application when they have made enough contributions to entitle them to something under the treatment benefit scheme. All of that is helpful and would provide clarity and transparency for people who pay tax in this State and who should be rewarded for that. In many cases, people do not understand because they are without the knowledge and do not have the information easily to hand in respect of what they are getting back for the PRSI they pay, which includes the State pension. I hope that will be looked at.

It is welcome that the Minister has agreed to work with Deputy Nash on this legislation. I hope we will see movement on this issue and that the Government will not be slow to intervene when it comes to pensions across the board, not just in respect of the State pension.


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