Marie Moloney (Labour) | Oireachtas source

I assure the Senator I will not be doing that, grandchildren perhaps but not children.

I welcome the Minister who, as always, is welcome. The report which all Members have read suggests all citizens should take out a private pension policy to supplement their State pension in years to come. This, of course, is because people are living longer which is most welcome, but the flipside is that there is greater demand on the pensions pot. I also came in armed with statistics and figures, but there is no need for me to reiterate them because everyone has articulated them well. Consequently, I will not go into that side of things. However, I will observe that the level of participation in the labour force drops dramatically at 65 years of age and that State spending on pensions will rise from 7% to more than 11% of GDP by 2060. While I appreciate that Members will not be around to see this happen, it is incumbent on them to govern and ensure the seeds are sown today that can be reaped in the years ahead. They must ensure there is enough in the pot to go around to ensure the children of today will not face poverty in their golden years.

One must not lose sight of the fact, however, that all workers in Ireland today and probably for a number of years to come are under financial pressure and strain. People are cutting out things they feel they can do without simply to meet their everyday financial commitments. I refer to items such as medical insurance, family holidays or even Sky packages. My fear is that most such persons will perceive a private pension to be an unnecessary priority, being something from which they would benefit in 30 or 40 years time because they simply do not have the money. I refer, in particular, to low and middle-income earners. One cannot underestimate the impact of the economic downturn and the effect it has had on people's lives. While planning for the future is commendable, people will not perceive it to be a priority. I welcome the Minister's statement that she does not envisage the introduction of automatic enrolment until the economy recovers, which is good news.

The report also states charges for private pensions and small schemes, in particular, are extremely expensive. It notes their unevenness and the need to address this issue. A further finding is that older people in Ireland are better off socio-economically than in other countries. I commend the Minister because her retention of the core social welfare rates for the present has kept it like this. While one must acknowledge the household benefit package for the elderly has been cut somewhat, at least the core social welfare payments have been kept intact, I hope permanently but at least for now.

As for the main recommendations, the report indicates that the two best options for the State pension in the future are a means-tested basic pension and a universal basic pension. I have problems with both options and will outline the reasons. On the means-tested payments, workers who have worked all their lives in this country, who have saved a little to put something aside for a rainy day and who have contributed tax, PRSI, the universal social charge and health levies to mention but a few items would be penalised in their old age by a means-tested payment because their savings will come against them as capital, which would be grossly unfair. As for the other proposal for a basic scheme for the entire population, I also have a problem with this. In theory, a person could start work at 16 years of age and work until he or she was 26. Thereafter, having satisfied the 520 pay contributions, such a person literally could be in receipt of social welfare payments for the next 40 years without having contributed much. However, a person who had worked 50 years of his or her life, contributed to the economy and the State in a huge way, would only receive the same pension. There is something wrong in that regard and it would not be right.

As I note my time is up, I ask the Acting Chairman for one minute in which to conclude.