Sheila Terry (Fine Gael)

I thank the Minister of State for coming to the House to respond to this evening's Adjournment matters. The Minister of State may be aware that the Government is to provide €500,000 to the pensions board to fund a national pensions awareness campaign this year. I am concerned that the pensions board will use the money to sell pension products by pointing out their benefits and informing people of the reasons they should provide for their retirement. I have heard the arguments involved for a long time and have raised in the House on a number of occasions the pitfalls of pensions.

Many people rang in to a radio discussion last week to tell the programme producer about their disappointment with the pensions plans into which they had paid for many years. As they approached retirement age, they were told by their providers that their pension schemes were underfunded or were being wound up. We never hear the pensions board advising people of the risks attached to pension schemes. In the interests of fairness and transparency, 50% of the €500,000 being provided should be spent to highlight the disadvantages or risks attached to pension schemes. The risks are not highlighted currently and people buy into pension schemes unwittingly without sound advice or information. As the Minister of State knows, the result of the McKenna case was that 50% of funding to inform a referendum debate should be spent equally on either side of the argument. I ask that the same happens here. We must have transparency. People are not receiving adequate information on how they should invest their money. They are realising after many years that they will not even get back the money they invested in their pension schemes.

In anticipation of this matter, I read last night through a document all Members received from IFSRA in which it set out its strategic plan for 2004 to 2006. While I would like to see the policies set out by IFSRA applied by the pensions board, I see nothing of the sort in any of its documentation. IFSRA plans to introduce in 2005 an integrated and harmonised code of practice for all financial services providers. As part of this project, IFSRA will endeavour to ensure that product costs, risks and benefits are explained clearly by financial service providers in the documents they provide to customers. IFSRA intends to produce new advertising rules and guidelines for financial service providers to ensure products and services are clearly explained. IFSRA points out that it acts in the best interests of consumers and works with integrity and transparency.

While I do not contend that the pensions board does not act with integrity, there is a lack of transparency in its operations. While the board is required to work in the best interests of consumers, it appears to be working in the interest of the pensions industry. The board pushes pension products constantly and the industry gains from the process. The board is not highlighting the risks.

When the pensions industry and the Pensions Board highlight, advertise or promote their products, they should point out that occupational pension schemes do not guarantee benefits, similar to a Government health warning. Financial institutions are quick to point out that a product is State guaranteed but the reverse is not the case and people are not given a warning that the benefits of a product are not guaranteed and may be at risk. A requirement or obligation should be placed by the Government on the pensions board to adopt such warnings in its code of practice and ensure financial institutions adopt that approach. The board works on behalf of consumers and its funding, which is provided by the taxpayer, should be spent fairly to highlight the risks of investing in occupational pension schemes so that people know what they are doing and the board is being fair to everybody at the end of the day.

The number of people who do not have pensions speaks for itself. People have not bought into PRSAs in the numbers anticipated unlike SSIAs. People opened SSIAs because they knew what would be the return on the fixed rate accounts and the risk attaching to the equity-based accounts. However, few people know what the return will be on a pension plan or what it is worth until the time comes and they are disappointed.

I have raised the issue a number of times and it needs to be addressed. I hope the Minister for Social and Family Affairs took my previous comments on board and I ask that my comments in this debate are conveyed to him so that something is done to improve the lot of people on occupational pension schemes.