Sheila Terry (Fine Gael)

I move amendment No. 1:

To delete all words after "Seanad Éireann" and substitute the following:

—supports all efforts to ensure adequate provision for pension and social welfare entitlements in the future;

—welcomes the increase in the value of the National Pensions Reserve Fund;

—expresses concern that growth in the fund in the last full year was behind the average achieved by private sector fund managers in this country last year;

—condemns the Government on its failure to make the system of public private partnerships work, leaving the NPRF management unable to invest in vitally important infrastructure;

and

—calls on the Government to do more to improve private pension cover, which remains low.

I welcome the Minister. We welcome the National Pensions Reserve Fund and the fact it is doing well. We recognise that in 2000 and 2003, it did not do so well and serious questions were asked of Government at the time. I accept that is the nature of this fund and that it will have highs and lows but it is still behind in terms of what private fund managers have been able to achieve in the past year. I hope it will improve because it will be required in the future.

I welcome the fact the Government is addressing the future needs of pensioners. Those pensioners include retired civil servants and those on State pensions. With an increasing and an aging population and with civil servants in receipt of decent pensions, there will be a great need for funding to meet the requirements of future pensioners.

I wish to raise a number of issues in regard to the fund. Why are we investing so much of this money abroad when there is such a need for investment in infrastructural projects in this country? Many people would agree some of that money should be invested here. If we are to prepare for the future and meet the needs of future pensioners, the best legacy we can have is to leave the country in a good state. While we have the resources, we should put in all the necessary infrastructure to give the next generation the tools to enable the country meet the needs of the pensioners of the future. One of the best ways we can prepare for the future is to build up our country. It is the same as asking how best one can secure the future of a young child. One provides him or her with the best education possible and ensures the child is independent when that day comes. In the same way, we must ensure that this country will be able to provide for the future. Money from the fund should be used today.

The chairman of the National Pensions Reserve Fund Commission, Mr. Carty, has expressed a wish that we would invest some of the fund in public private partnerships. Some €200 million was designated for these, €20 million of which was to be spent on upgrading the M50. However, this did not go ahead for various reasons and the work has again been, or is about to be, put to tender. I ask that we reconsider this matter to see how best we can deal with it. Public private partnerships comprise a very good mechanism through which the fund could be used.

The fund is invested in some unethical companies, including tobacco and arms companies, with which I and many taxpayers have difficulties. There are many ethical companies that would yield very good returns. The National Pensions Reserve Fund Commission is obliged, by legislation, to get the best return it can from the fund but there should be certain restrictions on the types of companies in which the money can be invested. I ask the Minister to consider this.

The other part of my amendment deals with the future provision of pensions. Since this is National Pensions Awareness Week, there is much media commentary on future pension provision and much talk from the Pensions Board encouraging people to invest in pensions. We have debated this issue in the House on many occasions. However, I have not received an adequate answer as to why people are slow to contribute to pension schemes or why the take-up of PRSAs is so bad. Owing to the disappointment of pensioners and those who are about to become pensioners over the performance of pension schemes into which they have paid, their sons and daughters have learned that paying into a pension scheme does not deliver.

Our legislation is such that we have made it easy for companies to change from defined benefit schemes, which would guarantee a pension for people, to defined contribution schemes, which give no guarantee regarding what sum they will ultimately receive. People have no faith in the pensions industry and the Government is doing nothing to restore faith through ensuring people will a have a pension if they pay into a fund. Until we can tell people they will receive a certain amount by paying into a pension scheme, we will be wasting our time. People are voting with their feet and investing in property rather than pension schemes because they feel they will get a better return.