Martin Mansergh (Fianna Fail)

As we can see from continental countries, if we do not handle this issue correctly, pensions will be a crippling overhang on the economy and the public finances. I was in Germany as a diplomat in the mid-1970s when it was already concerned about the effect pensions would have on the economy and public finances. That was at the stage of Model-Deutschland and the model German economy. Since the late 1990s pensions have had a crippling effect there.

One of the biggest achievements of our Minister for Finance is that he is tackling the problem in a number of different ways well ahead of time. He is putting 1% of GNP into the pension reserve fund. Although I know not everyone in the House agrees with that, I strongly agree with it. The Minister has also established many incentives for better private pension provision, including the PRSAs, and now he is introducing this Bill which provides for flexible retirement. Obviously it does not affect any older person and we must be clear when discussing it that it only affects those in their early 20s or younger.

I am a little surprised that the savings as a result of this measure are only estimated at €300 million annually. That seems small and I thought the effect would be more radical. The figure is not particularly significant and I find it difficult to believe.