Brendan Ryan (Labour)

I am severely tempted to comment on what Senator Brian Hayes has said but if I did the Chair would remind me to speak on the topic under discussion.

Like any lay person I do not possess the analytical or the actuarial skills to look 40 years into the future. We have to do our best to forecast what will happen. I read an article in the Irish Banking Review a few years ago about the pensions timebomb which was based on a number of assumptions, namely, that the population would decline and that economic growth would be approximately 2% in perpetuity during that period. The problem with all of this as any Minister for Social and Family Affairs, or any Minister who is as economically literate as the present Minister, will be aware is that if there are two trends which are only marginally diverging now they will be very far apart in 50 years. If the population shows any tendency to increase and if economic growth shows any tendency to increase at a greater rate than used to be presumed to be our natural level of growth, the crisis may not be as real as we imagine. That is not an argument for not making an intelligent assessment of how the markets operate efficient provision for pensions. I wish to tell the Minister an anecdote.

A young woman in her mid-20s not on a huge income decided, because she had heard so much, she should speak to a bank about a pension. The first thing the financial adviser from one of our major banks said to her was that she was too young to be worrying about a pension, that instead she should take out a long-term savings scheme. It is time we created a fairly unbreachable consensus that when one starts work it is time to start thinking about a pension. However well-intentioned the individual was, there should not even be a hint that it was a somewhat less than sensible thing to do. It is the first thing one should do and Senator O'Toole has referred to it.

Every year people work they contribute to a pension fund which is theirs for life and which is integrated in a way where they are guaranteed 34% of the average industrial wage. I consider that 34% is too low, 50% would be a much better objective and it would give people a decent income in order to have a decent life. We do not want people in their old age simply guaranteed they will not die of hunger, cold or lack of any of the basic necessities of life. We want people who are able to enjoy whatever good health they have when they retire. What is the argument against compulsion? Is it simply the political argument that it would be described as a tax, as many do, including those in the trade union movement who should know better and who describe social insurance as a tax? It is not a tax, it is an insurance contribution for which people in many areas of life are well rewarded.

Another issue is that of pensions in terms of benefit-in-kind as well as in cash. I watched my mother enjoy free travel for the best part of 25 years. Whatever the travails of the individual who introduced it, free travel was one of the most remarkable contributions to the quality of life of older people. The sheer pleasure of the mobility it gave people, particularly parents who were separated from their children, was enormous. It is anomalous that while most of the population retire at 65, they have to wait until they are 66 years of age to qualify for free travel. I suspect it would not break the Government to adjust the year of entitlement to the year at which people legally retire, which is 65. These little issues which do not cost an enormous amount of money are enormously important to older people who have the capacity to get around.

In regard to the myopia that gripped many in the 1990s when the view of the stock market boom was that it was different this time and would last forever, many tried to argue that meant we did not need a State substructure to protect pensions and that the markets would look after us. We now know that would not have happened. What is needed is a skilful integration of what the markets, the State, individuals and employers can do through their contributions. Members are always talking about employers and being employers. As it happens I am the director of a company, the Simon Community, which has at least 20 employees. The company has had to worry about their pension provision. Most voluntary organisations are substantial employers of people who must have pensions like everyone else so that the same issues arise. I do not believe an employer can simply walk away and say the pension fund is not his or her problem. It is an individual responsibility but an employer has some responsibility also. I do not have a problem with employers' social insurance and I have no problem with employers making a contribution towards people's pension funds as well, but it should be possible to integrate the three.

I invite the Minister who has a major influence on the Government to think about this issue. The reason the US will not run into the same pension crisis that Europe may run into is that it has a very liberal immigration policy. An article in today's edition of The Independent refers to the projected growth of the workforces in the US and the EU and indicates that the trends for both regions are going in different directions. It was interesting to watch the pre-election debates in the US in which both presidential candidates, Senator Kerry and President Bush, were asked what they would do about illegal immigrants. Their responses were so different from those one would hear anywhere in Europe. They referred to different ways of regularising the status of illegal immigrants because people in the US have come to recognise that immigration, far from being a burden, is the single most important phenomenon that has enabled the country's economy to be so dynamic, in terms of both individual output and hourly productivity. Hourly or worker productivity has increased so dramatically in the US because so many people are at work, partly because of the country's liberal immigration policy. It is time that we in Europe began to move away from our fortress Europe mentality and realised that to sustain our standard of living, we will not only have to tolerate immigration but also actively encourage it.