Dáil Éireann debate -
Thursday, 21 Nov 1991

Vol. 413 No. 3

Written Answers. - Pension Fund Protection.

Bernard J. Durkan

Question:

42 Mr. Durkan asked the Minister for Social Welfare if he has satisfied himself that sufficient controls and safeguards exist to protect the pension funds of contributors to such schemes in the State, semi-State and private sector; if his attention has been drawn to any instances in which such funds have registered a diminution of capital value in the past four years; if so, the reason and the circumstances surrounding same; and if he will make a statement on the matter.

Minister for Social Welfare (Mr. Daly)

The Pensions Act, 1990, which came into effect in January this year safeguards the interests of members of occupational pension schemes by setting down minimum standards which all schemes will have to comply with. It provides for a regulatory framework for the future supervision of pension schemes.

The specific objectives of the Act are: The establishment of a new statutory board to monitor and supervise the new statutory requirements; the introduction of aspects of a system of compulsory preservation and revaluation of pension entitlements of members who change employments; the introduction of a statutory minimum funding standard for certain funded schemes; the mandatory disclosure of information to scheme members; clarification of the directives and responsibilities of scheme trustees.

The new minimum funding standard is designed to ensure that over a period there are sufficient funds in a scheme to meet liabilities in the event of the scheme being wound up. Under the disclosure provisions the trustees of a scheme are required to produce annual reports and audited accounts on their scheme and to disclose a comprehensive range of other information to members concerning the operation and the financial procedures of the scheme. There are strict penalties for trustees of schemes who fail to comply with the regulations. I am satisfied that these new measures will provide adequately for the security of member's pension entitlements.

I am also aware of the difficulties experienced by pension funds/managers in recent times in relation to the investment of pension fund assets. These difficulties can be directly attributed to the effects on pension funds of the collapse of global equity markets in the wake of the Gulf crisis. However, despite this setback the indications are that pension funds have produced substantial real returns over the last decade.