Amendments Nos. 1, 14 and 15 form a composite proposal. It is proposed, therefore, to take these amendments together by agreement.
SECTION 1.
May I interject to request a list of the amendments that will be coupled together so that the committee may be aware of the grouping of them.
The first group is the group I have just outlined, namely, amendments Nos.1, 14 and 15. There is one other group, namely, amendments Nos. 11,12,and 13.
I understand that the groupings are amendments Nos. 1, 14 and 15 and amendments Nos. 11, 12 and 13. I thank the Chairman, as it is normal procedure that the committee has that information.
I move amendment No. 1:
In page 2, subsection (2), line 13, after "this Act", to insert "(other than section 15)".
The section contains the usual provision for the short title and the construction of the Bill and this amendment inserts a reference to the fact that there is a pensions provision appearing later in the Bill.
As the committee is discussing amendments Nos. 1, 14 and 15 together, I will deal with amendments Nos. 14 and 15. Amendment No. 14 provides for a technical amendment to section 62 of the Pensions Act, 1990, which is designed to confirm that the selection of trustees by members of occupational pension schemes requires a majority of members of the scheme who vote rather than a majority of members of the scheme. In other words, a majority of those who attend the session or who participate in the voting arrangements that are made rather than a majority of all the people in the scheme. This was a technical difficulty that was envisaged in implementing votes for trustees where members would vote on the selection of trustees.
Amendments Nos. 1 and 15 are consequential on amendment No. 14. Amendment No. 15 amends the long title of the Bill arising from the proposed amendment to the Pensions Act, 1990, and amendment No. 1 provides that the provisions of the Bill, other than the proposed amendment to the Pensions Act, 1990, will be construed as one with the Social Welfare (Consolidation) Act, 1993.
Section 62 of the Pensions Act, 1990, provides that members of occupational pension schemes consisting of a minimum of members may participate in the selection of trustees, so there is a quorum feature, only if a majority of members decide to do so. This section also provides that the employer sponsoring the scheme has a right to propose people to be appointed as trustees, subject to agreement by a majority of the members.
The regulations which I made under the provisions of section 62 last July become effective on 1 January next. These regulations provide that members of occupational pension schemes will be able to choose their own trustees to represent them. There are almost 500,000 members of occupational pension schemes. I provided a substantial lead-in time for this development so that there was plenty of time to have the regulations made and discussed in advance. That was done in order to give employers, trustees, pension schemes and trade unions ample time to prepare and train people to become member trustees.
The importance of having member trustees cannot be understated when one considers that there are up to one million people, including dependants and pensioners, who have a direct interest in the wellbeing of pension schemes. The selection of member trustees provides further safeguards for members of pension schemes, whose assets are worth some £13 billion currently. Under the regulations it will be mandatory for all schemes with 50 members or more and directly invested schemes with 12 members or more to have member trustees if the members so decide. This is a two stage process. First, a majority of members must decide they they want to appoint member trustees and, secondly, they must decide on the members to be appointed.
There is legal uncertainty as to whether the existing provisions of the Act mean that a majority of all members of the scheme or a majority of those who actually vote is required. Amendment No. 14 is designed to remove this uncertainty by confirming that only a majority of those who actually vote is required. The amendment also confirms that the existing arrangements in relation to trustees in a particular pension scheme may be maintained should the members and the employer so decide. It is really a technicality which has arisen in the implementation of the Pensions Act and since there is a question mark over it we want to put it beyond doubt. We have been asked by the Pensions Board and others to do so.
I have no major difficulty with the Minister's amendments. He indicated on Second Stage that he would be bringing forward an amendment to cover this matter. My colleague, the Fine Gael spokesman on Social Welfare, is indisposed at present and I am representing him here today. He would be with us but the Beijing flu has overtaken him in the last week.
I take the point the Minister makes that the purpose of this amendment is to remove the legal uncertainty that remains with regard to voting on the selection of trustees generally. We must underline how important it is that there are no legal uncertainties or that this procedure is not open to challenge, given the importance of the role of all trustees, but particularly of member trustees, in occupational pension schemes. It is important that there are member trustees who are contributors and depend on the occupational pension trust for their own livelihood in the future. They will have an even more important role to play when the Minster for Finance finishes raiding the till of the pensions trusts.
I thank the Minister for Social Welfare for ensuring that his colleague, the Minister for Finance, will not have it all his own way in this area because, believe it or not, there is great concern among pensioners about the budget threat or indication that he will raid the till for the Exchequer coffers. Pensioners who contributed through their working lives to a pension fund to ensure that in their old age they and their familes would be well and securely provided for are up in arms at the proposal that the Exchequer, through the Minister for Finance, Deputy B. Ahern, would raid the till of the fund of their savings. They want those savings invested securely to fund a pension for however many years are left to each individual pensioner. The Minister will probably tell me that this was a suggestion put by the Pensions Board or the head bottle-washer dealing with pensions; but the pensioners, the members and the member trustees will not take lightly the suggestion that any occupational pension fund should be raided by the Exchequer for whatever reason.
I support this amendment on the basis that it will strengthen the position of member trustees generally and that I would not like there to be legal uncertainty. I have one question for the Minister in relation to the quorum, the number of members present voting and the requirements in that regard. I would not like three or four people in a room to make extremely important decisions when there may be several hundreds or thousands of members of a trust. Could the Minister put our minds at ease as to what the minimum requirements in terms of numbers present will be and whether we are talking about a simple majority in the selection of a trustee?
I would stress the points on which Deputy Doyle concluded. I will not go back to the Minister for Finance's proposed attack. The concept of the amendment is good: tidying up was required and the amendment is designed to bring that about. It appears slightly wrong that three, four or five people can take an important decision on behalf of perhaps 1,500 to 2,500 people at home. Obviously, it is impractical to expect all members to be present, but we should look for some type of quorum for a first meeting. The regulation might be designed in such a way that if the quorum was not present at a first meeting then a second meeting could bring about a decision by virtue of a majority of members present at that second meeting. I would like some form of safety net introduced so that, at a first meeting at least, three, four or five people could not take an important decision on behalf of hundreds, if not thousands, of people who would not be present. I would like if we could make progress in that regard.
In relation to the question of the selection of trustees, in the first instance a person may be nominated for election as a member trustee by ten or more of the qualified members or 10 per cent of the qualified members, whichever is the lesser. That is for the nomination for selection. After that the person goes before all the members——
Present?
No, they will be written to and are invited to vote. That is the procedure. I presume it would be a simple majority after that, but in the first instance there is a safeguard in that one has to have at least ten qualified members or 10 per cent.
Whichever is the lesser?
Yes.
That is minimal.
In effect, it will be ten.
No. Some of these schemes have only 50 members. Many of the Irish schemes are relatively small in numbers of members. In any event, all the members have to be polled after that, so they are all invited to participate in the vote.
We all know that the response to any type of postal ballot is extremely low. Presumably, the Minister is still talking about a small minority of members who end up taking the decision.
I will certainly have a look at the regulations in relation to the quorum concept as it has been raised.
The quorum concept would only apply to the first meeting. If the quorum was not present, then at a subsequent meeting a simple majority of members present could take the decision. It would allow a safety to be put in place.
All the members must be written to anyway, so there is that safeguard in it.
It is like the branch AGM.
We will certainly have a look at that in relation to the regulations.
My antennae rise because I think of selection conventions and the efforts people make to ensure certain results. If there was no basic way of ensuring a minimum quorum at these meetings, it could be open to abuse by a section of members against another section's interests.
I will certainly have a look at that.
Thank you, Minister.
Of course, that pension trust would not be as competitive as Wexford.
Amendment agreed to.
Section 1, as amended, agreed to.
Section 2 agreed to.