Joe O'Toole (Independent)

I welcome the Minister to the House and wish him well with his new responsibilities. I want to raise a number of points and while I realise that some of them are perhaps the responsibility of the Minister for Finance, the question of pensions moves between the Department of Social and Family Affairs and the Department of Finance. Some of the matters I think should be examined here have worked in other countries. Senator Cox referred to American board rooms so I will begin with a proposal that has worked over there. Traditionally, pension legislation has been characteristically hidebound but in recent years the former Minister for Finance, Deputy McCreevy, relaxed it more than any of his predecessors. People have been afraid to touch some fundamentals, however, because of the sort of conservative thinking one gets from officials in the Department of Finance. I know this to be the case because I have argued some of these points with them.

I will cite one example in which I became interested five or six years ago, having met a man who had retired from the ESB. He had worked all his life in the ESB in a technical management area and was highly skilled. He was the most experienced person in his area and had been involved in the development of overseas tendering and bidding. It will be recalled that the ESB was involved in such work for many years before we made it legal, because the company was not supposed to be doing overseas work prior to that. This man had built up a wide level of experience. When he reached retirement age he was active and felt like doing more work, although he was not prepared to do so for nothing. He wanted to do some work for the ESB but under the terms of his pension arrangements he could not be paid a pension and a salary at the same time, although he may have been able to do some consultancy work. The man finished up working for Viridian, or the Northern Ireland Electricity Board as it was called at the time, which was the ESB's main competitor. Therefore, all the experience paid for by the ESB crossed the road to work for the competition. It would not be allowed to happen in a small shop down the country, let alone in a major national organisation.

I spoke to a number of people, particularly in Boston College, who had done much research on ageing and pensions. I found that some changes to the system had been made in the United States. The Economist picked up on the issue for a significant period. I am sorry to be long-winded about this but I think the Minister could build on this experience, which he may find attractive. They altered pensions legislation in the USA to allow people to change into different kinds of employment. That is the single biggest problem in this country; people are working full time one day and have nothing to do the next. The Minister should persuade the Government to take a more open view on the matter. Take, for example, a person in a major industry in Connecticut, who reaches an age where he or she does not want to work full time or retire fully. Under the American system, such a person can work in New England during the summer and then spend the six winter months taking it easy in Florida, on a rotating basis. How it works is rather complex, however. For the six months he is on retirement he is receiving pension at that rate. When he returns for six months, he still receives his pension and also receives a salary based on the hours he works. Out of that salary comes a pension contribution. I would not make this up if I had not checked. This is what happens on a six-months-on, six-months-off basis. People also work on a month-on, month-off or a half-time basis and everybody is a winner. The company is a winner, the person's quality of life is improved, creativity is maintained, productivity is increased and it is beneficial in all sorts of ways. The only reason we cannot do this here is that the law does not allow it.

I made a very strong case for this in the public service. While I will give the example of a teacher, it could apply to any workplace in the public or private sector. A school in Senator Cox's area of west Galway might require special needs support or remediation support. However, to have a full-time teacher in that locality could cost a significant amount of money and might exceed the school's requirements. A teacher living locally who has retired early might feel that he or she would not mind working three or four hours per week, but does not want this impacting on his or her pension. The school should be allowed to give the person four hours paid work per week while he or she continues to receive a pension. This solves approximately three problems at the same time.

As part of his work previously and now, the Minister will know that life expectancy has changed completely. I had major rows with the former Minister for Finance, Deputy McCreevy, when he made various changes affecting elected public representatives and others. Leaving that aside, everybody knows people will work longer but differently. Whereas different work patterns are coming in, they are not being reflected quickly enough in more flexible pension arrangements.

If I had total control over this matter, as well as introducing flexibility at the retirement end, I would also introduce a mandatory position at the early end. As the Minister will be aware, only 52% of people in the workforce have a pension. I have a simple theory, which I have argued with those in the private and public sectors and my colleagues in the trade union movement. For every year worked, an employee should have a year's pension contributions somewhere. I would have no difficulty supporting legislation requiring anybody working in employment for longer than six months to pay into a pension fund. We should not charge the employer with this task; dealing with the employer is another issue. I know how my colleagues in the trade union movement feel about this matter as I have had the argument with them. Not having this requirement is not doing anybody a favour.