Darragh O'Brien (Fianna Fail)

Specifically on the recommendation, I thank the Minister of State for clarifying his position. It is interesting to note, and I take the Minister of State at his word, that the pensions industry has not responded to correspondence from the Minister for Finance at a point when the Bill is before this House and will be dealt with this week. This is an indictment of the industry that I find incredible. I should not say "incredible" as I believe it, but from the industry's perspective it is incredible that its representatives have not responded to correspondence from the Minister with regard to the absorption of some of this levy.

While I will not go back over old ground, the Minister of State made the point for the recommendations themselves in that they remove the retrospection from this tax. Let us call this a tax because that is what it is. This tax is retrospective because it is taxing a value of a fund into which one could have paid over the past 20 or 30 years. The point of the recommendation is that if the Government must go ahead with the levy to pay for the jobs initiative, and it must find money somewhere, it should not crucify those who have been prudent, have made a decision and who have cut their cloth to measure to ensure they have sufficient funds on retirement. Incidentally, it was mentioned that 50% of people do not pay into pensions at all, some because they simply cannot afford to so do and others because they chose not to and opted for other, non-approved products or invested in property and so on.

In respect of management charges, the Minister of State will be aware that in 2002 or shortly thereafter, on foot of the changes in pensions arising from the PRSA legislation, a fee cap under PRSA arrangements of a maximum fund value of 1% was introduced at the time. This had the effect of lowering management charges for existing schemes that were above that. The point is that people who have paid into their schemes, especially on the defined benefits side, have an expectation that they will have a certain percentage of their final salary as a pension for life. This is particularly true for those who are within a year or two of their retirement. The Finance (No. 2) Bill effectively lets the trustees, employers and insurers off the hook. The Government proposes that the Minister will ensure that any impositions or changes will not be disproportionate. However, there is no definition of what that is. There are different categories within different schemes, different types of employees, different types of membership of a scheme and, consequently, this provision is far too loose.