Paschal Mooney (Fianna Fail) | Oireachtas source

I thank the Minister for her comprehensive reply. As she is aware, charges are excessive. In fact, the main bugbear is that the pension industry has been getting away with unacceptable practices for too long. I could not say at the moment what private pension charges I am incurring because I do not know. That is one of the reasons the second amendment has been tabled, as it would ensure that the total expense ratio of a pension scheme shall be a maximum of 2% of the scheme funds in any one year. My understanding is that in some cases it goes as high as 4% but, on average, it is approximately 1.5% to 2%. I am keen to put that on record. I am grateful to the Minister for indicating that one of the first tasks of the new pension board will be to inform people of the facts. The reason we tabled the amendment was to ensure that there would be that advice on a continual basis.

When the Minister is making recommendations I urge her to ensure there would be an obligation on pension funds to inform people every step of the way. I do not just refer to charges; I am talking about where they invest their money and the justification for the investment. I remember at the height of the building boom Irish pension funds in the main exclusively invested equity-based funds in Irish banks. They did not even bother informing themselves. They could not care less. The fund managers were so lazy. In fact they did nothing during the boom time. One did not need much expertise because the banks were flying. They did not even bother researching what other equity markets were delivering or what other options there could be for investors. In many cases we saw what happened as a result of the downturn. Pension funds went through the floor because most of the money invested was in Irish equities and banks. In some cases there were links between pension funds and banks and brokers were also linked to banks. I believe the latter practice still exists. There is a murky area involved in pension funds and I am pleased to hear the Minister intends to address it. I wish her well in that regard because she is dealing with sophistry. The Pensions Board bears a heavy responsibility to protect consumer interests. If the Minister did nothing else but that, it would be a big achievement.