Willie Penrose (Westmeath, Labour)
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Question 33: To ask the Minister for Social and Family Affairs if his Department has received the second actuarial review of the social insurance fund, provided for under the Social Welfare Consolidation Act 2005; the main findings of the review; when the review will be laid before the Houses of the Oireachtas; and if he will make a statement on the matter. [15384/07]

Séamus Brennan (Dublin South, Fianna Fail)
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The second review of the social insurance fund, SIF, which is required under section 10 of the Social Welfare Consolidation Act 2005, has recently been completed. The review was undertaken in accordance with the requirement that such reviews be carried out at five-yearly intervals, and the previous review was completed in June 2002. The legislation also requires that the report be laid before the Houses of the Oireachtas within six months of its completion.

The SIF provides insured contributors with pension benefits on retirement as a result of old age or incapacity, in addition to a range of short-term benefits. The fund covers almost all employees and the self-employed in Ireland, although some contributors are only covered for a limited range of benefits. The review examines the financial condition and sustainability of the fund at the end of 2005 when social insurance fund expenditure was €5.6 billion, income to the fund was €6.1 billion and there were some 2.8 million contributors. The aim of the review is to establish the medium and long-term financial position of the social insurance fund.

The review covers the period from 2006 to 2061. A key objective of the review was to consider the adequacy or otherwise of the current contributions to finance social insurance fund benefits. The review investigated the likely impact of different increases in benefit rates and contribution limits. In addition, the effects of adjusting the retirement age are explored and assessed. The report examines the potential financial impact of a number of possible future developments to the social insurance system.

The review was overseen by a steering committee comprising representatives of my Department along with representatives of the Departments of Finance and Enterprise, Trade and Employment. Economic assumptions relating to the period of the review were agreed between the steering committee and the consultants who also engaged an independent economist to assist in this process. Migration projections, based on the projections of the CSO, were developed in a similar fashion.

It is anticipated that the review will play an important role in ongoing consideration of appropriate social insurance contribution rates, payments and possible future subventions to the social insurance fund. I look forward to presenting the report to the Houses of the Oireachtas once the Government has considered its contents.

Willie Penrose (Westmeath, Labour)
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The reason the report has not been published is that it runs contrary to what was proposed by the Taoiseach at the recent Fianna Fáil Ard-Fheis. The report is being concealed. How long has the Minister had the report? What does the report contain? Does it call for sharply increased PRSI contributions to finance the future pensions of an ever-ageing population? Was a similar warning issued in a report in 2002? What is the proportion of workers to pensioners? Is this steadily declining? In 2002, some 5.3 workers paid PRSI for every pensioner. What is the figure per pensioner now? Has it not declined?

Social welfare benefits are financed entirely from the social insurance fund. That is sacrosanct and cannot be touched. It was run on a significant surplus except for when Mr. McCreevy raided €635 million from it in 2002. There will be a surplus of €1.3 billion this year and the accumulated surplus will be approximately €5 billion. It will take more than this figure to finance future pensions according to the report in the Department. Deputies are entitled to ask questions to ascertain the position.

We are all committed to providing a pension of €300 per week over the next five years. Does that not require a significant amount of funds from the social insurance fund? If there is a decrease in contributions to the PRSI fund, can the Minister guarantee that the €635 million deficit will be financed by general taxation to ensure that commitments to pensioners and others are met? Is that the position or was this announcement, like many others at the Ard-Fheis, a surprise to the Minister? Was the Department consulted?

Séamus Brennan (Dublin South, Fianna Fail)
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Allow me to clear up the timeline. This is the second review of the social insurance fund, required under section 10 of the Social Welfare Consolidation Act 2005. It has been completed and is before Government. Under the legislation, the review must be laid before the Houses within six months of its completion and clearance by the Government. From a legal point of view, the Government could wait until the end of the year to publish the review. There is no delay — we are ahead of schedule and should not be considering this for many months to come. This is due to the excellent work of the steering group, the consultants and officials involved.

There are now 2.8 million contributors to the fund. The fund, established in 1953, was in deficit until 1996. It had to be topped up by the Exchequer, as must be done by law if the fund is in deficit. The pension review and the Green Paper, which is almost ready for publication, makes it clear that the ratio of people of working age to those of pension age is continually falling. There is increased pressure on the fund. The cumulative surplus in the social insurance fund was €2.4 billion in 2005. The provisional outturn for 2006 is over €3 billion. It is capable of meeting its commitments and this review will enable people to see where the fund is heading. At present, it has a cumulative surplus.

Willie Penrose (Westmeath, Labour)
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Will contributions fall short of the benefits paid out from 2012? Will the cumulative surplus disappear? A significant input from general taxation will be required to cover the outflow arising from commitments on pensions, with which we all agree. The commitment made by the Minister's party will lead to an immediate shortfall of €635 million. In order to maintain the surplus general taxation must be used. What is the position? Will contributions fall as a result of proposed changes?

Séamus Brennan (Dublin South, Fianna Fail)
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The number of people at work is increasing all the time. The number of people contributing is growing steadily and is currently at 2.8 million. Assuming the economy keeps growing, in line with the Central Bank and other independent projections, the income to the fund will increase. Any proposals made in the context of the election campaign and manifestos are the subject of hot and heavy debate in the coming weeks. From my side of the House, we have recommended reducing the employee PRSI rate from 4% to 2%. We also propose adjusting self-employed PRSI from 3% to 2%. There is a cost involved and such costs must be provided from the Exchequer so that the fund will not be short as a result of policy proposals that the public may support.