Darragh O'Brien (Fianna Fail)

Senator Jimmy Harte referred to investment managers and the cost of managing pension funds. Deputy Shane Ross suggested pension fund managers should carry the cost. I would love them to do so if it were feasible. The average cost of managed pension funds, the funds associated with workers' schemes, is 0.75% per annum, as any of the Minister of State's officials would tell him.

More up-market pension funds are complex. There can be a 1% or 1.25% charge, sometimes more, on which people make a decision. Other pension funds have with-profit arrangements. They incur a fund management charge of 0% and the arrangement involves a bid-offer spread between the purchase and valuation price. Therefore, the idea that the pensions industry alone can carry the cost is not correct.

Foreign companies which locate their European headquarters here employ over 5,000 people in Dublin. These are Irish jobs and the staff are normal working people who are contributing to pension schemes. It is valid, however, for the Government to ask pension fund managers to examine the cost of managing funds. I am sure the Minister of State and the Department are aware that in recent years there has been a great contraction in management charges for funds because of the competition in the market. Scheme trustees and companies shop around regularly and switch funds from one fund manager to another on the basis of the management charge and performance. Some funds are managed on the basis of performance alone. In this case, where there is a reduction in the fund in a given year, no management fee is paid. I know of many such arrangements.

It is the responsibility of pension scheme trustees to seek changes to management charges. It is not correct for Senator Jimmy Harte and Deputy Shane Ross to state the cost can be borne by the industry alone. The Minister of State rightly stated he must be aware of taxation measures or reductions and how they affect other sectors. What is good for one sector may not be good for another. If the screw were turned completely on fund managers and pension companies in this city and elsewhere in the country, there would be substantial job losses in the insurance sector among normal workers who are themselves contributing to pension schemes. It is important to put on record that very few funds charge 2% or 1.65% or more, and they usually are the Rolls-Royce type schemes. Normal pension funds charge approximately 0.75% per annum. While I await the Minister of State's imminent response to the many questions raised, this issue must be addressed. Moreover, in the contacts between the Department of Finance and industry representatives such as the Irish Association of Pension Funds and the Irish Insurance Federation, what view did they give on potential payments they could make instead of the levy? What was the industry's view of the fund charges? Did its representatives claim the industry had no cash, was on its uppers or was employing X numbers? As I am sure the Department broached that issue with the industry, the Minister of State should outline its perspective in this regard.