Joan Burton (Dublin West, Labour) | Oireachtas source

We have an existing Pensions Board, which was established in the early 1990s. While it does have consumer interests, representatives of trade unions and employers on the board, there is a large complement of people from various sectors of the pensions industry. I am anxious for the new council to have a strong consumer orientation. Younger people are, by and large, entering into defined contribution schemes and they need to know when they are going to pay and whether they will be able to look up information on their account, whether it is a fund or an AVC, on a website and see what exactly they are being charged. That is critical.

The report also highlights some practices that emerged which can result in additional charges being made. For instance, a practice emerged of what is called rebrokering where, understandably, from time to time the people managing the investment fund of the pension would decide, perhaps, to change some of the investments of the fund. Extensive rebrokering could give rise in certain circumstances to further additional charges. The report explains that in some detail. That is something that ought to be advised. Our pension coverage in this country is poor. It is less than 50%. The contributory retirement pension and the non-contributory retirement pension are very high by the standards of most European countries. They are in the top three to five even after all that we have been through in economic terms. For many retired people the total package is worth approximately €14,000. That is not a huge income to provide for the kind of retirement a lot of people anticipate.

One of the things I have spoken about, in particular as the economy recovers, is that we might have a supplementary pension, such as auto-enrolment or a mandatory provision. The OECD recommended it. I do not think we would be able to do that at the moment because, as we have heard, lots of people are struggling with debt. We must wait until the economy recovers a bit. Countries such as Australia, New Zealand, and more recently the United Kingdom have increased the level of pension provision through, in the case of the United Kingdom and New Zealand, the development of an auto-enrolment system. If that, for instance, enabled people to provide a supplementary pension that brought the pension level up to double the retirement pension plus the supplementary pension, it would give people an income in retirement of €24,000. For many, that would enable them to live to a standard of decency in retirement.

The other pension-related issue is that the tax reliefs and capacity to invest, as Senator Mooney said in property was so large, upfront, that people were often blinded to the charges because the tax relief was so attractive. Pension tax relief is paid as one invests but one then pays tax at the end and if what emerges is a reduced sum and then one takes the tax on the pension product one must have one’s eyes wide open as one provides a pension.