Séamus Brennan (Dublin South, Fianna Fail)

I thank Senators for a worthwhile and fascinating debate and for their candid contributions. I am pleased that Senators acknowledge the size of the challenges ahead. As I said at the beginning, 75% of workers do not have adequate pension provision, which cannot continue. I must bring forward whatever initiatives are possible as soon as possible.

I thank Senator Terry for her list of recommendations and her positive approach. I understood her to say that it is all very well paying billions of euro into pension funds, but how does one know they are safe? When we hand money over to pension fund managers and they invest it in the Stock Exchange, in property or in Government bonds, how do we know we will get it back? The Senator was particularly opposed to any element of compulsion regarding the provision of pensions, not for social reasons but because if people were compelled to make private provision there would be no guarantee, given the nature of the market and the domination of equities as part of the portfolios of pension funds, that they would get their money back, even as a pension. I understand her concerns.

The Pensions Board has a number of mechanisms in place and it is required to try to ensure the health of pension funds by what is called the funding standard. Such funds must operate in accordance with the prudent person principle. I acknowledge, however, that there seems to be an undue reliance on equities. I take on board the Senator's concerns regarding the safety of investments in the hands of pension managers. The Pensions Board has significant responsibilities in that area. Nevertheless, there seems to be a very strong reliance on equities in the portfolios of pension managers. They are, therefore, exposed to the marketplace. Senator Terry called for a guarantee from the State to back up those funds. That is a major question and one at which I would not snatch. However, I acknowledge the difficulty the Senator has pointed out and thank her for putting it forward.

I did not suggest, although Senators may have thought I was hinting at it, that I would move to provide for mandatory or compulsory pension provision. It is one thing to make it mandatory for the State to provide a pension, it is another to make it mandatory that it be provided privately. It would be impossible to make it mandatory to have a private pension because that would require people to invest in funds, the security of which they were not happy about. However, we cannot allow the present situation continue indefinitely where people in their 20s taking up jobs make no pension provisions. I have children who are that age and I do not believe they have given any thought to the issue. Some Government will have to require, in some way, that they take account of their pension needs. That is as far as I will go on that at this point.

Senator Cox described very well the particular vulnerability of women in this area. I agree with her. Senator Leyden also gave an example. I am very conscious of that situation. Senator Cox also stressed the voluntary nature of pensions and the aspect of competitiveness regarding any move towards compulsion in that area. It should be remembered that the PRSI system is compulsory. People pay PRSI on their income and that entitles them to a basic State pension. The principle is not something about which we argue. We have already accepted it. All we are talking about now is the amount. It cannot be stated that it is a principle that one cannot be required to provide a State pension for people.