Brendan Howlin (Wexford, Labour)

Senator Cullinane misunderstands the structure of this legislation entirely. No pension calculation in the legislation is based on a monetary amount. It is based on a career average. Senator Bacik rightly noted that it would be unwise to insert a notional capped figure in money terms of €60,000, or €37,500 for an Oireachtas Member, payable to all new entrants in 40 years' time. Senator Cullinane is a brave man to predict the value of the euro in 40 years' time. That is when a new entrant would accrue a pension entitlement under this provision. It is a nonsense to try to cite a monetary value in the future in a Bill that is structured in a completely different way. The Bill is structured on a career average basis. The calculations were the subject of negotiations with the trade union movement and arbitrated by the Labour Court. We have accepted the figures and the careful balance of calculation in it. We should not upset that calculation.

Senator Byrne among others made the fair point that there is resentment and that there is a selection of people at the top of politics, public administration, the Army or the Garda who retire with remarkably generous payments. This was why I introduced an increase in the pension levy on such people of an additional 20% on top of all the taxes.

I am unsure whether anyone would be at a level where they would get a pension of €140,000. Perhaps it might apply to a former Supreme Court judge or a Chief Justice. The tax and levy imposed on that reduces it substantially for the existing pension holder. The very basis of the legislation, however, is to ensure that does not happen in the future. People received generous lump sums because they were related to their final salary. The new structure will be based on a career average and the pension will not be related to final salary. Once the Bill is brought into effect, future pensions will be calculated on the basis of annual contributions and they will be based on the salary for every year worked and updated in reference to the consumer price index.

The notion of an annual cap, picked out of the blue now and applied some time decades hence, does not sit into the Bill and does not make logical sense.