Sheila Terry (Fine Gael)

In recent days, we have heard about the concerns of those who took out equity-based SSIAs. The return they will receive on those investments will not be quite as good as they first expected. I wish to use that example in the context of the old chestnut of pensions. It is a very good example to examine when we discuss making mandatory the payment of contributions to pension schemes. One in five people opted for equity-based SSIAs and took the risks attaching thereto. They knew that they were gambling, but four in five were very cautious and contributed to the fixed-rate scheme.

My argument regarding pension schemes is that people will invest in them if they know the return. If we wish to make contributions mandatory, we must give people a fixed rate so that they know the nature of that into which they are paying. We cannot compel them to gamble with their money for 40 years of their working lives. The 10% figure is the equivalent of someone giving up four years' salary for the sake of a scheme that may never pay out what they expect. It has always been my argument that it is not good enough and equity-based SSIAs provide a very good example in that regard. The Government should consider what people will pay into, namely, something that ultimately guarantees a return. We must not compel them to gamble if they do not want to do so. When the Oxegen concert takes place this weekend the Pensions Board will be there trying to encourage young people to take out pensions. This is a waste of money. I wish they would do something about providing decent pensions that would give people a return. I would be interested in that development.