Sean Barrett (Independent) | Oireachtas source

I welcome the Minister. I was delighted that Senator van Turnhout quoted Mr. Frank Field, who has really interesting thoughts on the whole area of social expenditure. He is a most valuable member of parliament on the neighbouring island. I thank the Minister for bringing the OECD report to us. This is a problem we have been neglecting. The late Minister, Mr. Séamus Brennan tried on several occasions to start a pensions debate but he did not succeed. As other Senators have said, the fund former Minister, Mr. Charlie McCreevy set up has been substantially raided. There is hardly anything in it at this stage because of the performance of our banks and other institutions.

We must consider seriously raising the retirement age. The Minister saw the report last week on what is happening to young people. Approximately 10% of them are secure employment while the other 90% are dependent. The latter do not contribute until their mid-20s or even later given the high incidence of unemployment among young people. Entering the labour force at 28 or 30 and leaving it at 65 to live on the pension until 85 is just not fundable by any standard. We should actually grasp the nettle and raise the retirement age, even by more than the OECD recommends. In the OECD report, it is stated that we should examine mechanisms by which people can combine half a wage and half a pension when they reach retirement age.

We need to regulate the pension funds. There are so many trustees of pension funds who, until recently, were giving out added years like snuff at a wake. The schemes are broke. Governor Honohan is taking on board how we treat people who trade when insolvent. Many private-sector defined-benefit schemes actually went bankrupt while the trustees were adding years. Perhaps we should consider much stricter control over those.

I agree with what Senator Mooney said on charges. This is mentioned by the OECD. The case for a compulsory deduction for a pension is well made. It implies a lower cost. We all tend to put off thinking about it. It is a matter of setting a contribution aside, starting small, as the Senator said, such that the money will be available when needed.

There is a recommendation on the household benefits package in respect of the travel and the energy. It concerns the transfer into cash. That sounds well to economists but I can imagine the resistance one would encounter among people who like those perks. It is a suggestion that the OECD has made. We appear to have a larger provision of those benefits.

One might ask about all the PRSI that was paid and the universal social charge. Can one get for pensions an earmarked part of that money? People could legitimately say they have been paying to the State for years and question whether there should be a top-up payment to get a pension. I acknowledge there will be transition arrangements. On our being allowed to examine social fund expenditure, some will wonder whether we give too much in child benefit at the top end. The Minister shares the concern that too many disability and invalidity benefits were counter-productive, such that the social fund might have been more productively spent funding people's pensions. During the boom period, many children were brought up in households where nobody was working and who were instead registered as having a disability or invalidity.

The analysis of what social welfare is for and what it can be used for - a cause dear to the Minister's heart - is important. We must encourage people to save in addition to receiving the State pension. One regrets that so many chose to save by buying bank shares. Pensioners were destroyed by that system.

Like other Senators, I welcome, as always, the Minister to the House. There is much to discuss and I wish her well. I hope we do not put pensions on the long finger again and that we engage with the Minister in this discussion.