Darragh O'Brien (Fianna Fail) | Oireachtas source

The Committee of Public Accounts investigated that at the time. That was against Government advice and against an order given by the then Minister for Finance, the late Brian Lenihan. In that context, one can see the power trustees had to grant additional service without taking into account any additional cost to the rest of the scheme. I know Senator Barrett is aware of that and I want to let him know I am aware of it also.

This amendment makes a lot of sense in regard to providing additional information. I have a concerns about the change of priority orders in the Bill and with other aspects also. I worked in the industry for 15 years and saw some schemes where the trustees, as a separate legal entity to the company, made some sensible choices. I am concerned that this legislation may allow employers who would not have a conscience in regard to their pension scheme to use this avenue to simply extricate themselves from future liability. That is a major concern I have. I know of quite a large scheme in which I have a retained benefit where the trustees actually proposed the extension of retirement ages and a freeze in pensions in payment to get the scheme back on track. Every effort should be made to ensure they put forward those proposals to the Pensions Board. I know that had to be done earlier but many schemes clamoured to meet that deadline. I think the deadline was too tight and many of them left it until late in the day.

To get back to the amendment, I do not see any reason we could not be more prescriptive and accept what Senator Barrett proposed. If one looks at administration charges, fund charges, allocation rates within the scheme, commissions paid, renewal commissions and override commissions, in many instances all these things are actually far worse than in the report the Minister published. The problem goes back to the start, at which I know the Minister has been looking, which is disclosure at the very beginning. While the disclosure we have on pension products is well-meaning, a normal scheme member will not read it. If anything, there is too much detail. It comes as a big surprise to people as they approach retirement to find they have been paying into a scheme and that, in many instances, they have been charged way above the odds, where it looks as if everything is going grand and where they do not understand the 2% fund management charge which is significant because it is a compound charge on the fund.

While this is being done in the Social Welfare and Pensions (No. 2) Bill, the Minister knows a lot more needs to be done to bring it together. I have talked to former colleagues in the industry and if one looks at new investment in pensions - I am not talking about the large executive schemes but those for the normal worker - they are way down. In the industry, which is struggling, 10% of all business written is new business. The rest of it is business being passed from one investment house to another - existing schemes with retained benefits moving from one to the other. Our pension problem will get bigger.

If the Minister does not accept this amendment, how will she and her Department review legislation in the future? I know I am straying a little off the amendment. Investment conditions improve and scheme structures improve and, hopefully, fund managers and the risks and investment strategies they take will improve in the future. Some have done far better than others because they have taken a more prudent approach.

A pension should be a prudent long-term investment. Will the Minister consider this and other legislation that the Government is bringing forward to allow people to get out of defined benefit arrangements? I do not see anyone going back into defined benefits schemes because people have lost retained benefits, pensions and payments and have had entitlements reduced. I have an uneasy feeling that we are letting the employer, the fund manager and the trustee off the hook. The employer, the taxpayer and the Minister will in many instances be left carrying the can. When this legislation and other Bills are passed, we will be carrying the can for the mistakes that have been made, particularly in respect of priority orders and under-funded schemes because as things improve, no one will go back to the way they were. It is the person who has been prudent in trying to provide for his or her retirement who will be affected, not the fund manager, not the trustee and certainly not the employer.

The amendment is sensible. I would like to hear the Minister’s view of it because I and my colleagues will certainly support it. The amendment gives the Minister more information on the alternatives that a scheme trustee may or may not have tried. I have seen sensible arrangements for restructuring of schemes. They focus on the pensioner, the scheme member and those with retained benefits in funds that are fair. I am worried that many employers will see this as an opportunity to get out.

Are there any instances where the Minister would see this legislation impacting on the university schemes that were transferred to be managed by the National Treasury Management Agency, NTMA? How are they being managed? Are they managed as separate legal entities within the NTMA and does the Minister envisage any changes in those schemes based on this legislation?