Darragh O'Brien (Fianna Fail) | Oireachtas source

-----but we will leave the past in the past. He was certainly an excellent Member of the Seanad and I am genuinely delighted about his appointment. Obviously, he has not much time to read himself into what is being proposed in this legislation. These are fundamental changes. This is the first time the State has legislated to change a private pension scheme. I debated these proposals at length with the Minister's predecessor, Deputy Varadkar. I note there have been some changes in regard to two separate commencement orders, which effectively mean that no changes to retained or existing benefits can take place without the Minister's consent. Although I have been here since 2007, between the Dáil and Seanad, I have never seen it happen that a full section of such fundamental importance to a Bill was effectively replaced. The Minister listed a number of technical amendments in group one, which address errors including drafting mistakes and mistakes by the Department. There is an issue relating to the Pensions Act and the implementation of any changes in revaluation or to retained or existing benefits, and the Minister has rightly inserted a reference to the Pensions Act. I put it to him that if he had not done that, he would have been contravention of the Pensions Act.

I made a point on Second Stage that the changes to the IAS scheme, in view of the fact that the Government is legislating for one pension scheme as part of this Bill, should not have been made until the negotiations were completed and an agreement could be reached. I pointed out to the previous Minister, Deputy Varadkar, that a full pension section is being shoehorned onto the back of this Bill. It has been proven by what the Minister has brought to the House and by the Government amendments, particularly to this section, that the first draft of this proposal that the Government brought to the House was so substantially flawed that it had to be set aside. I could take solace, although I do not, in the fact that many of these changes were brought about by the debate in this House, in the Dáil and in committee, all of which I watched.

I welcome the two separate commencement orders, but I put it to the Minister that he is effectively giving power still to the trustees, particularly under section 32B(1)(b), which provides: "The consent of the members or of a company or other employer participating in the IAS scheme or of any other person referred to in any provision of the IAS scheme shall not be required by the trustees for the exercise of the powers conferred on them by this subsection." I genuinely ask the Minister to have a look at this. Because he is new to this ministerial office - and I wish him the very best - he would bring a fresh pair of eyes to it. This is effectively saying that the trustees can do what they like, irrespective of whether agreement is reached through the discussions with what is termed the expert panel.

The Minister may or may not have noted during the course of the past few months the effect that some of the proposals the trustees brought forward will have on the deferred members, those who worked in the companies to which we are referring - Aer Lingus, SR Technics and the Dublin Airport Authority, DAA - which could result in reductions in promised defined benefit pensions of between 40% and 50% of the expected benefit. I am sure the Minister will have received correspondence from the Retired Aviation Staff Association, RASA. Based on the proposals put forward, upon the passing of this legislation, which would give powers to the trustees to do what they wish to do, the retired aviation members will face reductions, on average, of €40 to €50 per week, although they do not, in the main, have the ability to earn additional income. Sweeping powers are being given to the trustees. I ask the Minister to reflect on the fact that his Department has had to replace whole subsection relating to pensions because it has not got it right. I asked the previous Minister, Deputy Varadkar, and I ask this Minister again to remove this section and introduce separate legislation should agreement be reached, or if it is not reached. I listened to what the previous Minister said about this during the debate on Committee Stage in the Dáil and he made the point that he was only putting this in place in case there is not an agreement, rather than having to recall the Dáil and the Seanad during the recess should this legislation need to be passed very quickly. I do not get the logic of that.

We are talking about 15,000 people and their families, one third of whom are retired and one third of whom are deferred pensioners, who, I note from the amendment that the Minister has introduced, do not have any say in what is happening because they do not have an employer who may move them into a scheme, as they worked for years under this scheme. The Minister probably knows much of this already; I am simply restating the position for him. Successive Governments, and in that I include previous Governments, have failed in this regard. This scheme was used as a vehicle, in many instances, to incentivise people to retire early. They were offered uncoordinated benefits in respect of early retirement. I still have not got an answer from the trustees, nor will they have to give it to me, regarding the point that it does not appear that any additional funding was put in place to fill those holes when people were leaving the company. The company, to boost profitability, asked a lot of people to leave and gave them an incentive through the scheme - which people took in good faith, and I do not blame them for doing that - but no requisite or subsequent contribution was made. That is one of the reasons for the big hole in the scheme. Instead of trying to fix this, we are prematurely bringing through legislation, in advance of any agreement, that will remove the rights of pensioners or retired members. Many workers feel - I can understand their position - that because the scheme is unfunded, they want to get into a new scheme; they do not want to keep paying into a black hole. I understand that. If the Government is willing to do this once and if it is willing to legislate for a private pension scheme, what is to stop any Government in the future from doing likewise? It sets a dangerous precedent. I acknowledge that the previous Minister and this Minister have brought about some changes to ensure that, should the trustees come up with a proposal that involves drastically reducing members' benefits, that measure will have to come to the Minister for him to sign it.

The Minister must sign away people's pension benefits. This will mean reductions in their pensions far more drastic than any cut to the household benefits package. There will be reductions in future benefits that people were promised and the Minister must sign off on that. Has the Minister been informed correctly in that regard? The Minister has been in the job a few days and is introducing a section that will effectively bring it to his desk in future. He will be signing away the benefits for 15,000 families across the country.

I urge the Minister to remove the section in its entirety and introduce it as separate legislation if required. When he considers the confusion about Cork Airport, which the Minister mentioned, it adds to my point that the section concerning pensions benefit was ill thought out, rushed and tagged onto a Bill when it has no business being in it. It is a significant change in the benefits of retired workers and their pensions rights. It should have been introduced in a transparent way in separate legislation.