Seanad debates

Wednesday, 14 November 2007

5:00 pm

Photo of Ciarán CannonCiarán Cannon (Progressive Democrats)

I am delighted to have the opportunity to discuss this motion. As my colleague, Senator O'Malley, said, this is an issue of great importance for the nation. The provision of an adequate and sustainable pension system is of great importance not only to current and future pensioners but also to the future prosperity of the country. If our generation, living at a time of considerable prosperity and benefiting from a historically high ratio of workers to pensioners, does not address this issue properly, it will place an unsustainable burden on workers in the future and endanger national prosperity. While the Green Paper does not give all the answers, it sets out the issues fairly and indicates the range of options to address them in a satisfactory manner.

I believe strongly that an adequate and sustainable State pension is the essential foundation upon which any system must be based. The Progressive Democrats has always been at the forefront in seeking to improve the State pension. It was the first party to advocate a pension of £100 per week in the mid-1990s when others said it was unaffordable. In Government, we achieved it. We then advocated a pension of €200 per week and this was more than achieved by 2007. In the previous general election we committed to a pension of €300 per week by 2012 and I am delighted that this has been included in the programme for Government.

While I am aware that the Government faces tight prospects in the forthcoming budget, I urge the Minister for Social and Family Affairs and the Minister for Finance to give priority to giving a significant increase to pensioners on 5 December to make more apparent our determination to reach and, if possible, exceed the €300 target in the lifetime of this Government.

Another important issue concerning the State pension affects the status of women who left the labour force for various reasons prior to 1994 when the homemaker scheme was introduced. Those of us who canvassed in the previous general election will have met many such women, many of whom are now widows, who were effectively forced out of work either by formal or informal marriage bars. They rightly resent the fact that their pension entitlement, if they have any at all, is dependent on the contributions of their husband.

In our election manifesto we committed to amending the homemaker scheme to ensure the aforementioned women would be entitled to a contributory pension. While this is not addressed specifically in the programme for Government, I welcome the commitment it contains to remove anomalies identified in the pension system and ensure women are treated fairly by way of pension provision. If any group of women deserves to have this anomaly removed, it is the women in question. Such reform will cost money but, unlike many initiatives in the pensions area, the cost will decline over time. This is because it only applies to people who left the workforce prior to 1994. In any event, an increasing number of women stay in or leave and return to the labour force nowadays and thus qualify for a contributory pension in any event.

I would strongly support further increases in the State pension as a proportion of average earnings after 2012 to bring it to approximately 40% of earnings. I recognise that if this is to be sustainable over time in light of changing demographic trends, we will all probably have to work longer. Most people today would be more than prepared to do so but every effort needs to be made to provide an environment that makes it possible. I therefore welcome the commitment in the programme for Government to allow people to benefit from PRSI contributions made after they reach 65.

However, initiatives must go beyond Government. Employers must be prepared to offer more flexible working conditions to workers at or approaching what is now regarded as retirement age. As we confront our changing demographics, the concept of a retirement age will become increasingly irrelevant. I therefore refuse to regard the change in the age structure of our population as a burden. We are living longer and healthier lives. In October 2006, Dr. Garret FitzGerald described this nation's rapid increase in life expectancy from 1999 to 2005 as a "remarkable phenomenon". Ireland had the lowest life expectancy of the 15 EU member states in the early 1990s. By 1996, it still had the third lowest life expectancy but by 2005, it had the sixth highest. Our workforce is increasingly healthy, educated and adaptable. We have proven ourselves capable of dealing with massive social change.

An adequate, sustainable and flexible pension system is an essential component in making a successful transition to this new demographic reality. The Green Paper gives us the tools with which to address the challenge of designing such a system.

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