Liam Twomey (Fine Gael)

I move recommendation No. 12:

In page 15, before section 8, to insert the following new section:

8.—Part 30 of the Principal Act shall be amended by inserting a new section:

"785.—A person who reaches retirement under a Defined Contribution Pension scheme shall from 1st March 2008 not be required to purchase an Annuity unless they do not have an income equivalent to a Non-Contributory Pension prevailing at the time of retirement.".".

This issue was discussed on Second Stage yesterday and in the Lower House. This amendment relates to pensions. People with private pensions who are forced to buy annuities on retirement will be under significant pressure in the next few years owing to changes in the stock market. The changes that have occurred, especially in the past 12 months, and which potentially will occur in the next few years have eroded and will erode significantly the value of such pensions. Changes need to be made to protect the pension benefits of those employees who do not have the same benefits as public servants whose pensions are based on their incomes on the day they retire. Private pensions are based on the value of the investment in the fund and policyholders are forced to buy annuities on retirement which may not retain their value.