Joe O'Toole (Independent)

I congratulate the Minister on generating a significant debate on pensions. It is a job well done. This issue has been discussed in the House previously and certainly with the Minister, Deputy Brennan, present on one occasion.

I only have time to make three fundamental proposals. It might be worthwhile if the Minister's public relations or media consultants telephoned RTE to ensure that the next time somebody in RTE discusses with pensioners how hard it is to live on a pension, he or she asks the pensioners if they made any arrangements for their retirement pension. The debate has gone too far to one side. I am one of those who will argue that the Minister should increase the old age pension. It should be larger and I will fight for and demand that. However, I also demand that people make provision as well. For that reason, I support the concept of compulsory pension arrangements. I have argued for it within the trade union movement for many years.

The establishment period before people get involved in such arrangements should be short but any period of employment longer than six months should have an equal and opposite level of pension contribution or pension arrangement. I will argue with anybody who takes a different view. How that is done, who should pay into it and what the responsibilities of the employers, workers and the State should be are matters for negotiation and argument. That is about implementation but the general principle must be accepted.

In my first couple of years as a Senator in the late 1980s, I took great satisfaction in negotiating the right of former Members to get their pensions back. Many Members who lost their seats cashed in their pensions. This is the quickest cheque people will get from the Department of Finance. If people seek to cash in their pension, the money will be sent almost by return post in case they change their mind. The Department wants to be rid of them. Now, anybody who is a Member of the House for more than a year must have preserved pension arrangements. It does not apply for lesser periods.

That is the compulsion issue. The second requirement is the introduction of significant flexibility in pension legislation. We need to examine the issue of "bridge" jobs. I could have predicted the response the Minister got last week because I have been there and dealt with it. The first response of people is: "I do not want to work until I am 70". It is an instinctive response. However, one of the groups who demand pensions is teachers, the people I represent most of the time, and they will be the first to say that although they do not wish to work until they are 70, they do not want a situation where they work full time to a certain day and are retired the following day. We must introduce flexibility. This has been done in the United States, where the legislation has been changed.

There must be flexibility for both social and practical reasons. Take the example of people who work for the ESB and who reach retirement age. They have built up a huge store of experience and knowledge in that industry. They would like to contribute more but not on a full-time basis. As they are drawing their pensions, they can no longer work for the company because the legislation does not allow them to draw a pension and also be employed. They therefore go to work for Veridian or some other company. In other words, they can bring all their experience to the opposition because we do not provide the flexibility to allow them to work for half the year, day or week. People should be able to go on reduced pension. They could continue to draw that pension and a salary and have a proportion of the salary apportioned back into their pension to allow it to grow. In other words, people would slide out of work into retirement.

My final proposal is the introduction of inflation-linked Government bonds. The case for doing so is compelling. I am aware of the arguments for and against their introduction and I have studied the issue for some years. We must introduce them. It would reduce the cost of private sector pensions by at least 5%. The Minister need not waste his breath talking to the Department of Finance because it will only offer reasons for not doing it. There are solid arguments against it but the arguments in favour are overwhelming and compelling.

Ireland is probably the only Western European country that does not have Government inflation-linked bonds. We have the old bonds which were issued in 1970 to mature in 2015 at a certain percentage rate. The cost of buying them simply increases or decreases to reflect what is happening in the marketplace or with interest rates. We need inflation-linked bonds which will attract investment and have more flexibility. I am aware of the pressures they put on governments but they are a reality in Canada, the United States and even Italy, of all places, which has a huge pensions problem. Between 20% and 30% of their government bonds are inflation linked. This creates a huge new market and one that is worth examining. We need to take that decision.

I have gone over my time and I would welcome another opportunity to discuss this with the Minister. I have made three proposals. The first is compulsion, where everybody should be required to pay into pension arrangements. The second is the introduction of legislation which would allow bridging, where people could bridge the period between full-time employment and full-time retirement. The final proposal is that the Government introduce Irish inflation-linked Government bonds.