I thank my colleague, Senator Mooney, for moving the amendment. I have debated a number of these points with the Tánaiste on a number of occasions, including during the debate on amendments tabled by me and Senator Power to the Social Welfare and Pensions Bill 2013.
Recommendation No. 8 provides that a solvent firm shall not be allowed to close a defined benefit scheme except where the scheme has reached a minimum 90% funding standard, which is the standard applied in other countries. The Tánaiste rejected a similar amendment to last year's Bill.
The Tánaiste will be aware of what has happened with regard to the Irish aviation superannuation scheme pension arrangements, that members of the Retired Aviation Service Association, RASA, are taking a six-week pay cut by way of a 2.53% levy per annum, that deferred members, many of whom the Tánaiste met and gave some hope to a couple of weeks ago, will be hit by 50% to 60% cuts to their pensions, and that current members have been bullied into an inferior pension scheme, all of which was agreed at the Aer Lingus EGM last week. The irony is that none of the 15,000 members of that scheme had an opportunity to vote on these arrangements.
The Tánaiste, Deputy Burton, is responsible for the introduction of single insolvencies and for providing profitable employers with the ability to shut down their pension schemes and wipe out any pension liabilities. She is also the Minister who, along with the Minister, Deputy Paschal Donohoe, and her constituency colleague, the Minister, Deputy Varadkar, presided over the doubling, by almost €750 million, of the deficit in the IAS scheme over two years in that she provided the Dublin Airport Authority and Aer Lingus with the roadmap that allowed them to wriggle out of their responsibilities. The Government and previous Governments also had a part of play in that regard. The Tánaiste will probably refer in this regard to the 2009 Act. I have tabled an amendment in relation to that Act because the usual response of the Tánaiste and her officials on this issue is to cite that Act. I am attempting to fix the situation. I thought the Tánaiste was at one stage going to try to fix this, and in that regard met the deferred members in particular.
I am very interested to hear what she said to them. They were under the impression she would do something. Everybody knew there would be an element of cuts, but the Tánaiste and her officials seems to have met these people and gone through proposed amendments with them to no particular end. Nobody considers it fair that people who are retiring next year will have 50% of their pension cut. It would not be done to a member of this Government, that is for sure. It would not be done to the Tánaiste or any of her predecessors, but it is fine to do it to people who have given 30 or 40 years of service to these companies, one of which was a semi-State entity.
Unfortunately, what is being done in respect of this particular scheme will have an impact on many other pension schemes in this country. In fact, I have already seen evidence of private pension schemes using the provisions the Tánaiste has brought forward to unpick their defined benefit schemes. There is a bonanza for employers because even though schemes were under pressure during the financial crisis, with double digit losses in investment, nobody is talking about that fact that in the past three or four years - not specifically with Irish equities but internationally, in the case of standard management funds - there has been double digit growth. That is all forgotten because there is an opportunity for employers - in this instance, Aer Lingus and the Dublin Airport Authority - to say that €500 million has been wiped out from the fund and it is the people who were compelled to join the scheme - they were obliged to do so; it was not an option - who must carry the can for it. As I said, I am aware of other private schemes which are already being wound down, but at least in those instances, people are being given the option to get out of the scheme. Defined benefit schemes are no longer what people thought they were and there will not be a single one left five years from now because of what the Tánaiste has done.
Recommendation No. 9 proposes that the 1990 Act be amended by inserting the following provision:
An appeals mechanism for pension scheme members shall be put in place where trustees have decided upon reduced benefits for members, and such appeals mechanism shall ensure that any category of such pension scheme members have not been unfairly treated in any restructuring arrangement.
This is an eminently sensible proposal given that the expert panel which was set up did not take the views of people such as retired staff and deferred beneficiaries into account or have them around the table. Employees will always have an additional ability to negotiate because they have industrial relations tools at their disposal. On the other hand, people who have left a particular company and are yet to draw down their pension or those who already are drawing it down do not have the same ability. In that context, recommendation No. 9 proposes the establishment of a proper appeals mechanism that will take their concerns into account.
Our objective in recommendations Nos. 11 to 14, inclusive, is to offer the Tánaiste another option in the form of scaled reductions in benefits in order to avoid another situation such as that which has arisen in Aer Lingus. Recommendations Nos. 13 and 14 relate specifically to the IAS scheme. My view is that it is not useful in general to table proposals relating, in this instance, to a specific pension scheme. However, it was the Tánaiste's constituency colleague, the Minister for Health, Deputy Leo Varadkar, in his previous Ministry, who brought forward the State Airports (Shannon Group) Bill 2014 which, for the first time in the history of the State, made provision in law to change a private pension scheme. The Tánaiste, Deputy Burton, agreed to that at Cabinet. The irony of all ironies was that she sent a back bench Labour Party Member, Deputy Brendan Ryan, to talk to the current Minister for Transport, Tourism and Sport, Deputy Paschal Donohoe, on the day he was signing the commencement orders on the pretence that she was even remotely concerned about what was happening. Of course, we all know now that she led people up the garden path and did not intend to do anything for them. Our recommendation No. 13 proposes to amend the 1998 Act by inserting the following provision:
The IAS Scheme shall not be allowed to close its pension scheme except where the scheme has reached a minimum 90 per cent funding standard.
Unfortunately, this provision probably comes too late, because the Tánaiste and her Cabinet colleagues - the Minister, Deputy Donohoe, certainly - circumvented the whole process by moving forward with the signing of the commencement orders in advance of our dealing with the legislation before us today.
Recommendation No. 14 proposes the amendment of the 1998 Act by the introduction of the following provision:
The IAS Scheme shall not be allowed to close its pension scheme except where all pension scheme members are treated in an equitable manner on the winding up of that Scheme.
We realise that what is happening here is effectively not a wind-down, but this recommendation was tabled before the latest developments. Nobody can say that what has happened here is fair. I did not expect in a million years that the Government could come up with €700 million to plug the hole in the pension fund, but I likewise did not expect that such drastic cuts would be brought about in such an arbitrary manner to people's promised standard of living. Members of the scheme who were due to receive pensions of €16,000 or €17,000 per annum - not the €60,000 or €70,000 the Tánaiste will be able to draw down after the next general election should she not succeed in being returned to the Dáil, but approximately one quarter of it - will see their payment reduced to €8,000 or €9,000. That is not fair but, unfortunately, the Tánaiste did nothing to try to change it. I expected more from her. If she checks the Official Report she will see that more than two years ago, during the debate in this House on the Social Welfare and Pensions Bill which introduced the change in the priority order and brought in the single insolvency provision, I made specific reference to the Aer Lingus scheme. I flagged my concern at that time that we would end up in precisely this scenario.
I will be pressing each of these recommendations. I hope the Tánaiste might, at this very late stage, take them on board. This issue is affecting people in Dublin West in the same way as it is affecting people in Dublin North. I am sure she has been contacted by constituents and, indeed, by people from all over the country. To be fair, some of her party colleagues did their best to try to convince her and the Minister for Transport, Tourism and Sport to take action. There is no point in her coming in here and saying she could not do anything else; of course she could have done something else. What she has done is shown those, including, in particular, some of her Fine Gael colleagues in government, who might want to sell certain State assets in the future exactly how they can wipe off a deficit in a pension scheme, increase the value of that company and sell it off.
We have been raising this matter for nearly two years and it is quite depressing to see what is happening to the 15,000 members of this scheme. These are normal working people - not people with massive pensions - who paid into the scheme all their lives and gave great service to the company for which they worked. The Tánaiste and her colleague, Deputy Donohoe, have taken the legs from under them. She has a final opportunity now, before the cuts commence on 1 January, to do the decent thing by rowing back from this. I have debated these issues with the Tánaiste before and I could talk about them all afternoon. I hope she will see some way of addressing the matter at this late stage. I do not understand why she spent time meeting groups from these schemes when she apparently had no intention of doing anything. I do not get it, but perhaps she can explain. I appeal to my colleagues on the Government side to do something decent before the end of the year by supporting these recommendations.
