Ivor Callely (Dublin North Central, Fianna Fail)

The Senator asked a number of relevant questions, which I will answer as best I can. The allocation of €500,000 is specifically for the campaign to raise awareness of pension issues and the need for people to supplement their current pension plans if they wish to maintain their living standards following retirement. The campaign does not focus on or recommend a particular product but encourages people to consider the options available or to consult with their employers or a pensions provider to identify the most appropriate arrangement for their circumstances. Pension schemes, in general, depend on investment returns to fund future pension needs. Equities are an important part of the investment portfolio of pension schemes and, accordingly, the assets of schemes can vary depending on market conditions.

This Minister will be before the House in the next few months to introduce the social welfare and pensions Bill, which he intends to publish shortly. It contains measures to ease difficulties being experienced by many schemes in meeting the funding standard laid down in the Pensions Act. A statutory review of the overall pensions strategy was due to be carried out in 2006. However, given the limited progress on coverage targets over the past two years, as the Senator pointed out, the Minister has decided to bring the review forward. It will be undertaken this year and it will focus on a range of issues, including coverage and measures to improve the current position.

The Government is anxious to encourage people to participate in occupational pensions schemes or to consider personal arrangements such as personal retirement savings accounts, PRSAs. The pensions board in its report on the national pensions policy initiative in 1998 suggested that up to 70% of those in the workforce aged 30 years and over needed to supplement the basic social welfare pension if they were to maintain their pre-retirement standard of living. Government policy in recent years on pensions has, with the support of the social partners through successive partnership agreements, focused on achieving this target.

A national campaign to raise the profile of pension issues among the public has been an important part of the Government drive in this area over the past two years. In this regard, €500,000 was provided to the pensions board annually in 2003, 2004 and this year to run such a campaign. The objective of the national pensions awareness campaign is to raise public awareness of pensions generally, to educate people about options available and to encourage them to consider the most suitable arrangement for their circumstances.

The Minister does not consider that statements along the lines suggested by the Senator would be an appropriate part of this campaign. The objective is not to sell a particular arrangement or product but to raise awareness and to educate so that people are equipped to make informed pension choices. The disclosure requirements for pensions and PRSAs and the sales procedures for personal products, laid down by Irish Financial Services Regulatory Authority, are intended to ensure people are aware of the issues associated with particular arrangements and that they choose the most appropriate arrangement for their requirements.

The campaign has been extremely successful in raising public awareness of pensions issues. The Minister suggests that as a result of the debate engendered by the awareness campaign over thepast two years that not only are people aware of the need for supplementary income in retirement, but they are also conscious of the risks involved. While there has been success in increasing overall coverage rates, unfortunately, the progress does not suggest that the overall targets are likely to be reached within a reasonable period.

An overall review of our pensions strategy is required to be completed by September 2006. However, given the progress made the Minister decided to bring forward this review. It will address issues of coverage and ways of improving the current position. The Minister expects to receive the pensions board report in June and, at that stage, he will consider what further action is required in this area.