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Dáil Éireann debate -
Tuesday, 31 Jan 2017

Vol. 936 No. 3

Pensions (Amendment) Bill 2017: First Stage

I move:

That leave be granted to introduce a Bill entitled an Act to amend the Pensions Act 1990 to prevent solvent companies walking away and reneging on their pension obligations to their employees.

In recent years there has been a concerted effort to close defined benefit, DB, schemes regardless of the health of the company. We know this is happening. We saw it happen most recently in Independent News and Media. If a company is profitable as Independent News and Media is, then it cannot be allowed to walk away from its pension commitments to its employees.

In reviewing our pension system in 2012, the OECD clearly identified healthy sponsors being allowed to walk away from defined benefit pension plans and shutting them down as another weakness of Irish legislation. Back then, the OECD recommended that Irish legislation should be strengthened to ensure that healthy sponsors are not allowed to walk away from defined benefit plans unless assets cover 90% of pension liabilities. If, as legislators, we do not address what Independent News & Media has done we will be allowing other companies to do the same. We are saying that this is okay and we are actively leaving the door open for other companies to do the same. We cannot allow healthy companies to decide they no longer want to fund employees’ pensions and to then consciously commence winding down defined benefit pension plans.

This Bill is about ensuring that employers' obligations are honoured. It is about protecting schemes and employees. The Bill directly addresses the issue of healthy companies walking away from DB pension schemes. It strengthens legislation and it ensures that employees are protected. It also implements a key recommendation from the OECD, which, if implemented at the time, would have prevented the issue at Independent News and Media arising. According to the Irish Association of Pension Funds, the number of defined benefit DB schemes has fallen from just over 1,200 at the end of 2006 to fewer than 500 today. The number of active members in those schemes has dropped from 270,000 to 126,000 as of the end of last year.

These schemes and members must be protected. There is an onus on all legislators to ensure they are. With cross-party support for this Bill, we can send a clear message to companies that they will not be allowed to wind down consciously their defined benefit pension plans and renege on their pension commitments to members.

Is the Bill opposed?

Question put and agreed to.

Since this is a Private Members' Bill, Second Stage must, under Standing Orders, be taken in Private Members' time.

I move: "That the Bill be taken in Private Members' time."

Question put and agreed to.
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