Marc Ó Cathasaigh (Waterford, Green Party) | Oireachtas source

I welcome the Bill. It was a key recommendation of the OECD's review of the Irish pension system that we had to increase that supplemental pension coverage. That word "supplemental" is important. Deputy Duncan Smith alluded to it but I do not believe it is within our compass to make any promises about future governments, however. The system is designed to be supplemental and it does not in any way, shape or form reduce the responsibility of the State. What we are talking about here is providing a minimum floor, which is what the State pension is designed to do, as opposed to income adequacy or a replacement rate of income. That is what we are hoping to do here under the AE system.

Under AE, employees will have access to workplace pensions, a savings system scheme co-funded by the employee, the employer and the State, and it is a response to 25 years of inaction, as outlined by the Minister, but also to the demographic challenges that were outlined in very clear-eyed terms by the Commission on Pensions, which the Joint Committee on Social Protection, Community and Rural Development and the Islands scrutinised in some detail. This is a job of work that needs doing because, as the Minister outlined, two thirds of people in the private sector do not have private pension provision. That is 800,000 people who, when they come to retirement, will face a cliff edge in their incomes.

The joint committee, of which I am the Leas-Chathaoirleach, put a considerable amount of work into the pre-legislative scrutiny of this legislation. We had six individual sessions meeting with groups such as ICTU, Irish Life Assurance plc, Pensions Authority, Irish Business and Employers Confederation, Insurance Ireland, ESRI and, of course, officials from the Minister's Department.

It was a considerable piece of work because we knew that it was very important legislation. I am somewhat disappointed to note from analysis done by the Library and Research Service that of the 21 recommendations that were put forward by the Oireachtas joint committee, only two have been accepted in full, six have been accepted in part or are reflected in the current draft of the Bill and 13 have not been accepted either in full or in part. We did not make any of those recommendations willy-nilly; a considerable amount of work was done on this. I am therefore disappointed in terms of not only the work we do as a committee but also the inputs we get from civil society groups and the wider sector when we ask them as a committee to come in to speak to us about the contents of a Bill. It is difficult to make the case that they should take that type of engagement at pre-legislative scrutiny stage seriously when so few of the recommendations are accepted.

I am a little nonplussed by the Sinn Féin criticism of the Bill. We did speak in committee about the potential of the role of the NTMA. It is difficult to know whether the NTMA would in fact have the capacity to do what Sinn Féin speaks about. I do not quite see how it is a protection because even if the NTMA were to act as the intermediary, it would still be investing in the private sector. How that would insulate that investment from shocks within the wider investment system is unclear to me. Perhaps Deputy Ó Laoghaire would like to send me on the document he spoke about in his contribution.

I, however, will focus in on one specific provision, or lack thereof, within the Bill. This is one of the recommendations we made as an Oireachtas joint committee and it is about the key issue of what the money can be invested in. As regards the feedback we have on that recommendation, I refer to a Library and Research Service document on this. It is important to note that the NAERSA - I am sure we will have to come up with a better name for that at some point - will not be administering a new State fund but, rather, will be administering hundreds of thousands of individual savings accounts that will be the personal property of the AE participants. This is with regard to our recommendation that investment funds be prohibited from investing either in fossil fuels or in the arms industry. These are, of course, individual pension pots, but I disagree that the State does not have a responsibility to respond to the responsibility that comes with that level of investment. The State will make a significant amount available for this pension provision into the future and, along with that money, our values, the values of the State, should be reflected in that.

It would not be the only time the State does something like that. We have frameworks for responsible investing already in place at scale. That is included as part of balancing hedge portfolios. For example, ISIF has divested from several areas, such as cluster munitions, tobacco manufacturing and nuclear weapons. Basically, we do not want Irish money involved in those types of investments. The Fossil Fuel Divestment Act also prohibits ISIF from investing in companies that derive more than 20% of their turnover from the extraction, exploration or refinement of fossil fuels - the likes of coal, oil, gas and so on. We have a structure within the NTMA. The Irish sovereign green bonds working group, with a wide membership of the NTMA and several Departments, came up with a framework for investment with six eligible green categories set out in the ISGB framework. I will not go into them in that kind of detail but I do feel strongly that while we have written ESG considerations into this Bill to the effect that it should have regard to climate and other frameworks, we need to make it explicit within the Bill that a considerable amount of Irish money will be put into this on behalf of the Irish Government and that there should be restrictions as to where this money can be invested. If we have a number of pension pots, that is, if we have that low risk, medium risk and high risk, then let us define one of them whereby we have this kind of ESG or this divestment characteristic and make it the default. We know from international evidence that most people defaulting into this will come in through auto-enrolment and will stay in the one place. Let us try to reflect the values we hold as a nation in the way we invest our money. I strongly feel that we should include that in this legislation.

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