Sheila Terry (Fine Gael)

I welcome the Minister back into the House to discuss this important Bill. While I feel it is a continuation of a debate we had previously, I now want to address some of the points raised in this Bill. I must acknowledge that matters have improved for many people and that is only fair. Given our economic growth, we would expect that everybody should benefit from it. While I accept that many people in many areas have seen improvements, I must also acknowledge that some people have not benefited from the growth in our economy. Ireland is one of the EU member states with the greatest rich-poor divide. There are aspects of this Bill that will increase the difference, which I will address when I speak on the topic of pensions.

A recent CSO report estimated that approximately 120,000 children and more than 23,000 lone parent households are living in consistent poverty. We should not be proud of this. While I accept that improvements have been made, we are still falling short of what we should be doing. In light of a recent debate on lone parents, I recognise that the Minister wishes to address the issue and improve the lot of many such struggling individuals. They would appreciate the opportunity to work if provision were made for the difficulties they face, such as child care costs. I await the Minister's proposals to ensure that lone parents and their children do not have to live in consistent poverty.

A Combat Poverty Agency study launched in 2001 shows a clear link between low income, poverty and ill health. The poor are more likely to be ill and to visit a doctor more often than people on higher incomes who take care of themselves better. The Government has failed in its promise to increase child benefit payments for the third year in a row. I acknowledge that improvements have been made but a commitment was given that has not been lived up to. The child dependant allowance, a payment for families struggling on social welfare, has been frozen since 1994. The back-to-school clothing and footwear allowance was not increased for a second year in a row.

I draw the Minister's attention to the shortage of education welfare officers. Teachers are struggling with the problem of children missing for longer than the 20 days allowed before an education welfare officer is alerted. Some children miss up to 80 days, even more in some circumstances. There are nine counties that do not have such an officer. If we could help children with problems in primary school and their parents we would save them heartache in the future and would save the country the cost of dealing with the difficulties experienced by these children in later life. This is an issue we must tackle. The correct number of education welfare officers must be in place in order to cope with the present large backlog.

There was a constructive debate on the pensions aspect of this Bill in November 2004 to which the Minister gave consideration. There is, however, a difference between listening and taking on board the suggestions made. The Minister did not take a blind bit of notice and I wonder whether we were wasting our time putting forward suggestions on behalf of our electorates. As his predecessors did, the Minister listens to the pension industry and vested interest groups more carefully than to us.

I am disappointed to see that the Minister has given in to these groups through the amendment introduced on Report Stage in the Dáil on 1 March 2005. I refer to the EU directive on the activities and supervision of institutions for occupational retirement provision which sets out a framework for the operation and supervision of occupational pension schemes. Article 18 of the directive deals with investment rules, whereby "borrowing by pension schemes is prohibited other than for liquidity purposes and on a temporary basis". We have known for some time that this directive was in the melting pot but why did Ireland breach it? We did so when the former Minister for Finance, Charlie McCreevy, introduced this provision to allow people to borrow money to invest in property. We know this provision was abused, particularly by individuals with larger pension schemes, and we know that the pensions board was opposed to this scheme because of such abuses. While there is a provision in the directive to allow for exemptions for smaller schemes, the Minister said in the Dáil on Second Stage that, if the scheme was not working well for the larger schemes, it would be prudent not to allow it for the smaller schemes. The Minister will correct me if I am wrong in this.

Someone has now influenced the Minister into making exemptions in certain cases. I do not know what these cases will be but it was stated that they will be smaller schemes. Through this legislative loophole, fat cats in larger schemes will transfer to smaller schemes. Why is the Minister doing this, who has bent his ear and who is he helping? It is not the ordinary PAYE worker who will benefit. He should introduce regulations that will help to protect existing pensions and encourage the creation of new ones. The Minister claims he wants people to take out pensions but they will not do so. There is no protection for them and the eventual worth of their pensions will be lower than expected. Under this Bill we will be looking after the fat cats and not the ordinary man on the street. I am disappointed that the Minister has given in to industry pressure as I did not believe he would. Once again we are helping the pensions industry. The Minister listens to it but not to the ordinary man in the street who wants his pension protected.

The pension schemes of the top ten companies in this country are underfunded to the tune of €3 billion. The pensions fund deficit was €1.9 billion in 2003 and is now over €3 billion at a time when the stock market grew by 10.4%. Those figures do not add up. How can those pension funds lose so much money and be underfunded by such an amount while, at the same time, the stock market is going up? What are they doing with the funds they are getting from the hard-pressed worker? Who is raiding the fund and what are they doing with the money with which they are entrusted? What rules is the Minister putting in place to ensure they manage those funds properly?

The Minister is making it easier for them to continue losing money. If a scheme is underfunded, the Minister proposes to extend the funding period for ten years. What evidence is there that this will be effective? If in the good economic climate of the past two years the pensions industry lost money, how do we know its funding will be any better in ten years' time? Companies are winding up their pension schemes or changing from defined benefit schemes to defined contribution schemes, another fudge. People will not know what they will get when they retire but the pensions industry knows what they are putting in. We are not protecting these people and I ask the Minister to offer them some protection.

If such a friendly hand is being extended to the pensions industry, what is it being asked for in return? Could it not be asked to put in place a bonding scheme so that if a company goes bust or has to wind up its scheme, some protection would exist for the workers? Why can it not give something back? No pensions industry company is losing money; they are all earning large profits.

IFSRA should be put in charge of the pensions industry. It is doing a fine job. The Pensions Board, while doing a good job, exists to promote pensions not to protect them. IFSRA should investigate the value for money the Government is getting because the tax incentives the pensions industry gets do not offer value for money to the Government or the taxpayer.

I will vote against this Bill. I am disappointed that the Minister is helping the pensions industry which is not delivering to its members. It is time it was shaken up and I hope IFSRA will get the opportunity to do it.