Jim Walsh (Fianna Fail) | Oireachtas source

I would hazard a guess that there are few, if any, functioning as they should. In many instances the people at the top of these organisations are marking time on enhanced salaries until they get their pensions, which will not be cut or contributing to the scheme.

I have a letter from somebody in the ESB, and we all know that we may be facing an industrial relations crisis with that company. My understanding from this correspondent is that something like €80 million was being taken from the ESB fund by the State because of the pension levy. The Minister for Finance gave a commitment at the outset that this measure would exist for four years at 0.6% and with the 2012 budget he went on record in the House as saying it would be discontinued this year. That is not happening. If one cannot believe a Minister for Finance on a significant taxation issue, what confidence can anybody have in this regard?

The Minister did not highlight another element in her speech. These people are not getting 50% of final salary in pensions and in many cases, an inflation factor is built in. Where such an inflation factor is built in, it would range from 3% to 5%. The Minister can correct me if I am wrong but these people will be deprived of that sum. In a company where I worked, people left on a fixed pension and within a period of years, it had eroded to almost insignificance because of inflation levels. Currently, there is a worry about deflation in Europe but following a financial crisis, it is very likely we will end up at some stage with hyper-inflation, as that is a normal cycle. That would have a serious effect on these pensions, and there is no commitment, as far as I can see, to any of these people that their position will be addressed by way of a review of their pensions. This is a bit like shifting the chairs on the Titanic, taking provisions from one person and giving them to another. We are doing too much of that. I would like to see a real root and branch analysis of the pension scheme.

The Minister has not highlighted the capital cost that will be required in order to meet the deficits that will arise. I am sure the Department or the Pensions Board has done some assessment in that regard. Even with the private pensions into which people have paid, there is a very low volume of people in the private sector with any pensions other than the State provision. That is not good when the demographics are changing, as they are, and we have done nothing to tackle the major deficit of approximately €120 billion or €130 billion in the public sector. Something more serious and fundamental will have to be done with pensions. I am particularly disappointed in this Bill, as it only scratches the surface. Two years after the Minister identified the problem - she is an accountant so she understands the issue as well as I do - it must be tackled in a much more comprehensive manner than is evident with this Bill. It is a pity that has not happened, and the opportunity has been missed.