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Scale of pensions crisis of the Government’s own making – Morgan

1 December, 2008

Sinn Féin Finance Spokesperson Arthur Morgan TD has said the scale of the crisis arising out of the devaluation of private pension funds is of the Government's making.

Speaking today after a leaked Government memo confirmed that thousands of workers' pensions are close to collapse amid global financial turmoil Deputy Morgan said the Government actively encouraged people to invest in private pension funds without providing anything like the level of oversight and regulation needed in this sector leaving Irish workers savings open to the chaos of global financial markets.

He said, "The Government must carry out an urgent review of private pension funds with a view to intervening in the current crisis for those approaching pensionable age. Minister Hanafin, despite her claims of ignorance, was made aware of this looming crisis as far back as a month ago by the Irish Association of Pension Funds (IAPF). Since September 2007 the Irish pension funds have lost up to €18.1 billion.

"It was also acknowledged by Irish financial experts in 2003 that 'Irish Pension funds hold disproportionately high levels of equities, which could lead to crisis situations if falling equity markets persist'. There was no one in government listening then and the same is true today.

"The Minister's response is completely insufficient and akin to the Government's handling of the credit crisis. To simply allow more time for the markets to stabilise the situation is more likely to exasperate than to fix it.

"The scale of this crisis is of the Government's own making as they have been actively encouraging people for years to invest in private equity based pension funds while dithering on the introduction of a Government backed pensions saving scheme. This has exposed people to the turmoil of the global financial markets and has led to the crisis which has been exposed over the past weekend." ENDS

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