Joan Burton (Dublin West, Labour)

A large number of issues were raised. The discussion has been ongoing since 2007 about the way in which demographics have been changing in Ireland. To our great success and credit, probably due to people like Professor Crown, more people are enjoying an extended old age. It is anticipated that life expectancy will rise significantly in future and whereas currently there are between five and six workers for every person on a pension, it is anticipated that by 2050 there will only be two workers to each pensioner. Here, a generous system of credits was developed, which allows people who take time out of the work force to look after children or elderly relatives to sign on for pension credits and get a pension in due course. That was a good innovation and it has been here for several decades. There is a cost and we must consider how to structure working and meet the costs of providing an adequate retirement income for people when they are older.

With regard to Senator Crown's comments, it is well worth exploring the notion of people being allowed to work for longer, perhaps deferring a pension and receiving an enhanced pension entitlement having worked for longer. That would be very appropriate in future as many people are now staying on in further education, training and travelling, only really commencing long-term contract, permanent or self-employment in their middle to late 20s. The people referred to have done hard manual work. They often started work at 16 years of age and were more than happy to retire at 60 or 65 years of age or even younger, if that were possible. There are very big demographic changes taking place. The framework being applied in terms of the age changes was set out by the previous Government in 2010 and adopted in the IMF memorandum of understanding. A commitment was given by the previous Government that the changes would be reflected in law by the end of the second quarter, that is, the end of June. We are doing this as part of the IMF structure because we have committed to doing so but also because the underlying demographic changes have to be provided for.

Senator John Crown also raised the issue of people being able to take some money out of their pension funds. Certainly, that is an issue that needs to be examined. While it is quite risky and would have to be examined in a careful and restrained manner, it occurs in some jurisdictions at a modest level. People have been talking about this issue in the context of a person in negative equity who is in so much debt, be it personal or business, that he or she is in danger of losing either the family home or being forced into bankruptcy. The matter would have be addressed very carefully. They would have to refund the tax relief gained when putting the money into pension fund schemes. Certainly, the issue deserves examination, but it would not be for everybody. It would not be advisable for a person with a very small pension fund to exhaust all of his or her pension fund if on reaching pensionable age he or she would depend entirely on the State.

The question of incentivising pension funds to invest here was raised. We would like to see this happen. One of the ways this could be done is through the provision of a pension bond. People will recall the experience of the National Pension Reserve Fund which was utilised for the bank guarantee. High levels of assurance would be needed. For the investment a rate of return would be needed and it should be locked away and prevented from being utilised other than for pension purposes. Certainly, it would provide for an extra strong item on the balance sheet of Ireland rather than seeing the money being invested around the world. One of the problems, according to the most recent Pensions Board report on Irish defined benefit pension schemes, is that funds have been heavily invested in equities which because of the financial crisis in Europe have not done so well. That is an additional factor defined benefit pension schemes have not done well in Ireland. Perhaps, saving, as opposed to playing the market for retirement, ought to be the watchword, that is, one saves and takes a reduced risk and a more conservative return. The level of security with such a more cautious investment would be higher than for many of those who took advantage of the arrangements introduced by Charlie McCreevy, whereby the safest way to provide for one's pension was to spread one's investment around the Irish banks. Those who directed the bulk of their pension funds at such an investment have been wiped out. That is unfortunate and we all have lessons to learn from the pensions crisis.

That people who are fit, able and well can work and contribute for longer is critical. I am advised by my colleague, the Minister for Public Expenditure and Reform, Deputy Brendan Howlin, that he will bring forward legislative changes to permit those in the public service to work for longer and to alter pension arrangements in parallel with the arrangements being made in this instance. Equally, there are people who, for health reasons and because of the work they have been doing, may wish to retire earlier. What we need to do when we recover our financial sovereignty and financial well being is have a more flexible approach to the age of retirement. We should bear in mind our recent visitors, Queen Elizabeth II who is 85 years of age and the Duke of Edinburgh who is 90. I saw both of them march up a steep staircase in Dublin Castle unaided. I have been informed that among Supreme Court judges in the United States, for whom retirement at around 85 years of age is recommended, there has hardly been a case of Alzheimer's disease or dementia because they have been constantly engaged. Obviously, it has enabled them to remain extremely active into what we would describe in Ireland as old age. Sometimes people talk about-----