Éamon Ó Cuív (Galway West, Fianna Fail) | Oireachtas source

Caithfidh mé a rá i ndiaidh dom seo a leagadh amach, ní leor seacht nóiméad leis an méid atá le rá agamsa a rá. Déanfaidh mé mo dhícheall. Bille ollmhór é seo agus Bille an-tábhachtach atá ann.

There are 141 sections and 95 pages in this Bill. I only have seven minutes to outline my thoughts and that is not sufficient.

I am not totally convinced at the merit of a highly regulated private system over the possibilities of a public system. For the next 30 years, people are going to be putting a lot of money into private funds for private investors and I would rather the State would have that money.

I was impressed by the contribution made by Deputy Gannon during yesterday's debate. He raised some interesting issues. One of the obvious questions is why we are not going towards a pay-related State pension. That goes to a fundamental issue that cannot be answered by the Minister, by me or by anyone else. It is a dread thought that I have. Is the whole idea of this to save money into the future? The only way to save money into the future by introducing this measure is to steadily reduce the real value of the State pension. It will not affect me and will probably not affect too many people in my lifetime but as time goes on, I would worry about that. Of course, I will be assured it will not happen and it will be index-linked until the next crisis.

Another issue I would like to raise is the fact that for every €3 someone puts into a pension pot, the State is going to put in €1. When people put €100 into a pension policy, they get tax relief and a kickback of €40. I have seen calculations done by the Department but it seems to me that if I want to put €100 into this scheme, I have to put in €66.66 and the State will put in €33.33. On the other hand, if a high-income person wants to put €100 into a pot, he or she will put in €60 and the State will put in €40 by forgoing €40 in tax. That seems unfair because it means people at the top end are better off than those at the bottom end.

My other big concern does not relate directly to the Bill but I fear that many pensioners who were comfortably off while they were working are going to be very badly off when they retire. The reason is that until now, the vast majority of pensioners were in local authority housing or owned their houses. That is true of the vast majority of people with whom I deal. In the future, however, a big cohort of people are going to be in private rented accommodation. Those who are on a very low income will get the housing assistance payment, HAP, or State assistance for their housing but those who are on a modest or medium income will have to pay the rent when they draw down their pension and that will become a large part of their outgoings. That is going to create a new poor whom we seem to be ignoring. If I was starting off again and had a reasonable job and was asked to put money into a pension or to make sure I owned my house, I would say that the best pension investment I will ever make is to own my house.

We were told that if we put our money into an investment scheme, it would work out to so much after 30 years. However, we were not told what that would be worth in today's money on the basis of the average inflation of the past 30 years. When I started working, my salary was small. In real terms, it was minuscule. It would be a fraction of today's minimum wage. When you put money into a pension pot, you think you are getting a lot of money, that the money is earning money, but in real terms, depending on inflation rates, it may not be earning any money at all. That is something at which we need to look.

The pre-legislative report of the Joint Committee on Social Protection, Community and Rural Development, and the Islands raised questions. An enormous amount is going to be invested in these funds. The State will put in €1 and the employer will put in €3, as will the employee. Adding €6, €6 and €1 totals €13. Some 80% of that money will fly the island and will not be invested here. Until now, the experience is that only 20% of investments by Irish pension funds are invested in Irish equities and bonds. Perhaps this is addressed in the Bill because I did not have a chance to read all 95 pages but I believe that a mandatory minimum of auto-enrolment funds should be invested in Ireland to ensure that Ireland benefits economically from these funds. I also believe we need to lay it down clearly in the law that there will be good investment practices in respect of sustainability and environmental, social and governance factors. We should ban outright investment in fossil fuels and the arms industry. We should ban investment in fossil fuels because they are damaging the climate and in the arms industry because it is totally immoral to invest in that industry. We live in a world in which if we are not careful, we will not have to worry about pensions because we will all blow each other up long before they become a concern. That, unfortunately, is a real risk at this part of my life. The last time I remember thinking that was during the Cuban missile crisis in the 1960s.

There should also be a statutory requirement to invest in Irish renewable energy developments to ensure our climate action targets are achieved. Without achieving those targets, the question of the future of all pension funds will be at risk from climate change.

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