David Norris (Independent) | Oireachtas source

I apologise to the Minister for not having been in the House earlier and I am afraid I will have to leave but I will read her response. I know she will understand the situation because she is in a much more extreme situation than me. I am trying to juggle about nine things at the same time and I can only imagine what her life is like.

I wish to endorse a great deal of what my colleague, Senator Jim Walsh, has said. I listened to him with great interest. I am not as much of a fan of private enterprise as he is: I would be a little more to the left, which may or may not recommend itself to the Minister. I have particular concerns with regard to the fact that even after the Bill is enacted, companies can walk away from certain of their obligations. This is very regrettable. I know there are difficult situations and I know certain firms are in periods of tumult financially and may be going under and so on but it is indefensible that a company that is solvent, trading and making profits, should be allowed to deny previously made pension profits. In particular, I refer to the case of Aer Lingus which denies that it has any responsibility to meet some of its pension promises.

The retirees now have no access to the Labour Court or anywhere else and there is very little they can do. If inflation takes off again, there is no provision for any mechanism for increase. Therefore, the affected people are left stranded.

This part of my contribution is taken very largely from the substance of a letter I received just this morning. It puts a human face on the matter. The writer states Aer Lingus has a very good balance sheet, is solvent and has cash in hand. Furthermore, he states:

I can't stack this up at all with any sort of notion of "fairness".

I did declare my interest - I am a pensioner member of that Scheme, and, Senator, I am worried. I saved and provided responsibly for my retirement and made a "life plan" accordingly. My "life plan" is in tatters.

I regret I was prudent. I should have had a ball and left it to the State to provide for me in my dotage. A place in a 12-bed geriatric ward seems to be what I can look forward to now - maybe a corner bed near a window if I'm lucky!

That seems to me to indicate that values that are important to this country, such as prudence and making provision for old age, are being undermined.

Consider the circumstances of employees in the airline industry under the IASS proposals. With regard to Aer Lingus, the scheme is frozen and no additional funds will be paid into it. Outside the IASS, the current funds placed by Aer Lingus of €140 million are being allocated as follows: 2,570 current employees will share in a fund of €110 million, or approximately €92 million after productivity pledged on foot of cost stabilisation, but there are 3,687 - over 1,000 more - deferred pensioners who will share a fund of simply €30 million.

With regard to the proposed cuts, including the removal of statutory preservation, CPI, and a period of deferment, as provided for in the Pensions Act, this could equate to a 25% loss of real pension every ten years. There is to be an increase in the IASS pension age of 65 years to a State pension age of 66 from 2014, 67 from 2021 and 68 from 2028, except where there is more than 25 years service. Reference is made to a 12% straight cut and compulsory commutation of 25% of pensions.

The Minister will remember I spoke about deferred pension members on the last occasion. With regard to the combination of the aforesaid cuts, I must refer to the paper I have to hand. I try not to read. I am all right with words but when I get to numbers, I find the difference between 5 million and 500 million difficult to contemplate. My innumeracy is almost entirely due to some kind of genetic inadequacy or something. It means I do not really follow numbers so it is better if I read them from the document. I apologise to the House for doing so.

For deferred members, the combination of all the above cuts will equate to a loss of between 45% and 55% in their expected benefit. That is a hell of a lot. If one averages the figures, it amounts to half the expected pension. This makes the point that the gentleman made in his letter to me. The expected pension of a 55-year old individual who left in 2005 with 25 years' service and a final retiring salary of €40,655 will reduce from €23,608 to €9,925. That is a loss of 57.95%, which is vast. I wonder whether the Minister and her advisers will be able to state whether the figure is correct. Consider another listed example concerning an individual who left the workplace in 1998 with 27 years service on a final retiring salary of €34,523 and who is now aged 62.9 years. One can tell from this and the inclusion of percentage points that there has been an actuary involved who has calculated the worst possible case, but it is no harm to make that case. The expected pension for the individual will be reduced from €23,105 to €12,043. That is the minimum State pension and it represents a loss of 47.8%.