Section 26 makes minor amendments and definitions to the provisions dealing with equal treatment and limiting jurisdiction to employment within the State, otherwise it could be implied the Pensions Act has powers beyond the State, which is not the case. What is the position if a percentage of the assets are outside the State? What is the position of Irish workers on contract abroad?
SECTION 26.
Question proposed: "That section 26 stand part of the Bill."
Irish employees working on contract outside the State will be covered from their home base, in other words, from within the State. That has been referred to in other legislation. I am not sure what the position is if the assets are outside the State. However, the rules of the country which is determined as the home country will apply. The scheme is set up within the State and is, therefore, covered from within the State.
Question put and agreed to.
NEW SECTIONS.
I move amendment No. 17:
In page 16, before section 27, to insert the following new section:
27.—Section 67 of the Principal Act is hereby amended by—
(a) the insertion in subsection (3)(c)(i) before ‘justifiable' of ‘objectively',
(b) the insertion in subsection (3)(d)(ii) before ‘justifiable' of ‘objectively'.".
This amendment inserts the word "objectively" before "justifiable" in section 67 of the Pensions Act, 1990. This section deals with equal treatment and the insertion of the word "objectively" is in line with European Court of Justice judgments in this case.
Amendment agreed to.
Amendments Nos. 18, 21 and 22 are related and may be discussed together.
I move amendment No. 18:
In page 16, before section 27, to insert the following new section:
28.—Section 71 of the Principal Act is hereby amended by
(a) the substitution for subsection (1) of the following subsection:
‘(1) Where a rule of an occupational benefit scheme does not comply with the principle of equal treatment it shall, to the extent that it does not so comply, be rendered null and void by the provisions of this Part with effect from the 17th day of May, 1990, in the case of a rule relating to employed persons and with effect from the 1st day of January, 1993, in the case of a rule relating to self-employed persons and the more favourable treatment accorded to it by persons of the one sex shall be accorded by it to members of the other sex in respect of periods of membership in that scheme up to the date on which the rule is amended to comply with the principle of equal treatment.‘.
(b) the substitution for subsection (3) (inserted by section 62 of the Social Welfare Act, 1992) of the following subsections:
‘(3) Where any rule of an occupational benefit scheme relating to employed persons is rendered null and void by subsection (1), nothing in this Part shall preclude any rights or obligations, relating to a period of membership in that scheme before the 17th day of May, 1990, from remaining subject to the provisions of the scheme in force during that period of membership—
(a) during the period beginning on the 17th day of May, 1990, and ending on the 31st day of December, 1998, or, in the case of retirement ages, the 31st day of December, 2017, or
(b) in respect of members who cease to be in relevant employment to which that scheme applies before or during the period referred to in paragraph (a).
(4) Where any rule of an occupational benefit scheme relating to self-employed persons is rendered null and void by subsection (1), nothing in this Part shall preclude any rights or obligations, relating to a period of membership in that scheme before the 1st day of January, 1993, from remaining subject to the provisions of the scheme in force during that period of membership.'.".
This amendment, together with the amendments to sections 28 and 29 which follow, relate to equal treatment provisions. Section 71 (1) of the Act, as at present worded, does not specify an effective date. However, since all of Part VII becomes operative on 1 January 1993, subsection (1) automatically applies the more favourable treatment to the disadvantaged sex from that date. By rewording subsection (1) this amendment will provide for the more favourable treatment with effect from 17 May 1990 — the date of the Barber judgment — in the case of a rule relating to self-employed persons.
The amendment also provides that the more favourable treatment will apply in respect of periods of membership up to the date on which the rule is amended to comply with the principle of equal treatment. For example, if a rule is not formally amended until 1 January 1997, then the more favourable treatment must apply in respect of periods of membership up to 1 January 1997.
Subsection (3) is restricted to rules relating to employed persons and not to the self-employed. Paragraphs (a) and (b) of section 71(3) are amended by specifying 17 May 1990 — the date of the Barber judgment — as the date the relevant period begins, instead of the number of years specified at present — 25 years in the case of retirement ages and six years in all other cases. It now specifies the date when the period ends: 31 December 1998 and 31 December 2017. A new subsection (4) is inserted, dealing specifically with the self-employed.
Amendment No. 21, to section 28, which amends section 74 of the Pensions Act, 1990, is substantially the same as that in section 27. The main differences are that there are no references to 1 January 1993 or to self-employed persons as this section deals only with employees.
Amendment No. 22, to section 29, which amends section 74A of the Pensions Act, 1990, is substantially the same as that in section 27. The main differences are that there are no references to 1 January 1993 or to self-employed persons, as this section deals only with employees.
We welcome and agree with those amendments.
Amendment agreed to.
I move amendment No.19:
In page 16, before section 27, to insert the following new section:
"27. — Where it is the case that there is joint funding of a pension by two spouses or partners and where it is required, the fund may be divided even before the fund matures.".
This amendment is more relevant to sections 11 and 12 of the Family Law Act, 1995. Because of changes in society, two people may now contribute to a pension fund, either as a single or married person. Before the fund matures, which usually takes 30 or 40 years, the arrangement may break up and they may want to divide the pension fund. We have to be clear on these provisions. Section 11 of the Family Law Act states:
Subject to the provisions of this section, on granting a decree of judicial separation or at any other time thereafter, the court, on application to it in that behalf by either of the spouses concerned or by a person on behalf of a dependent member of the family, may, during the lifetime of the other spouse, or, as the case may be, the spouse concerned, if it considers. . . . .
If there is an amicable separation, could the people concerned divide the fund, whether it contains £50,000 or £100,000, without having to go to court? Many people, especially the less well off, could not afford the expenses that would be involved.
What is the position where two people contribute jointly to a pension fund? They may be working for the same organisation. In some cases, one spouse or partner may be a high contributor to the fund while the other makes smaller contributions. If they want to divide the fund it should be straightforward and simple. More people will wish to avail of a division of the pension fund and not have to wait 40 years until the fund matures, as one or both of the people concerned could be in different associations over the years. When we take into account the changes in society it would be practical to make this process clear, straightforward and simple, particularly if the separation is voluntary and amicable.
I am not sure it is possible to make those provisions. Deputy Walsh appears to be saying that where there is a joint contribution to a pension by spouses or partners, the funding might be divided before it matures. From experience, as far as I can ascertain, the court has the power to decide this. Regardless of whether the pension allows for it, a value is put on the pension when it matures and the court decides on the division of the assets. There is no guarantee that both parties will agree with the decision, whether it is an amicable dissolution. From my own experience, that is the case at the present time and it applies regardless of whether the particular policy or fund was open-ended in the way Deputy Walsh suggested.
What he suggests could also have other consequences. There could be a partnership or a marriage breaks down. The Family Law Act, 1995, to which the Deputy referred, provides for the splitting of the assets, including pensions. It might be more appropriate to leave the matter to a different Act rather than to introduce the provision here. That is the advice I have been given.
I have dealt with this situation on behalf of constituents, as have other Deputies I am sure and it has not caused a problem so far because it is possible to determine with reasonable accuracy the value of the pension at maturity and, as a result, arrive at an equitable distribution of the assets without going into greater detail. The courts may have other factors to take into account at that time, for example, there may be a determination that the proceeds should not be divided equally and there may be another distribution. This also has happened. It depends on the circumstances. Accordingly, I oppose the amendment.
I will not press the amendment. However, I require elaboration and clarification. The Bill should take into account societal changes where arrangements split up. If, for example, the two people concerned want to divide the pension fund and obtain an actuarial evaluation on which they both agree — it appears that a court must decide the matter under family law — we should make it as straight-forward as possible. This Bill will take us into the next century and we should prepare accordingly. We should legislate for this and future generations.
I am anxious to facilitate because this is legislation for the future. Times change and considerable changes have taken place which were not anticipated when the previous Acts were introduced. We will consider the points raised by the Deputy regarding application, if necessary on Report Stage. Every Member of the Houses of the Oireachtas will have encountered situations where change or improvements are needed. We are anxious to assist in this and we will look at the situation. If it is deemed to be beneficial and necessary we will consider the matter further on Report Stage.
Amendment, by leave, withdrawn.
I move amendment No. 20:
In page 16, before section 27, to insert the following new section:
"27. — Having regard to the Barber decision in the European Court, the ownership of all existing and future fund assets and surpluses shall be defined as belonging solely to the members of the scheme and such surpluses shall be apportioned between the members by increasing their benefits, subject to revenue limits and any balance shall be treated as a contribution holiday over a defined maximum period of 5 years.".
This is a straightforward amendment. In modern commerce pension companies may merge, amalgamate, subsume or be privatised. The Barber decision stated that contributions were the property of the members. Where members contribute to a pension fund which is in surplus and if the company managing that fund is taken over or privatised, predators should not avail of the surplus or of individual members' contributions.
When the ICI encountered difficulties some years ago which required the taxpayer bailing it out, the company entered into an arrangement with a French company which has stated that it wishes to privatise this arrangement. The company is managing a surplus which comprises of members' contributions.
This legislation seeks, above all, to protect the interests of members. The amendment seeks to copperfasten the rights and contributions of the members where a fund is in surplus. No company, be it national or foreign, should be allowed to take over a company and help itself to the funds which members have contributed to over many years.
I note the points raised by the Deputy and I understand the ground he is covering. However, the consideration of surpluses has been referred to previously in speeches by the Minister. It is an issue which will need to be considered by the Pensions Board, It is very involved. While we are anxious to cover the issue raised by the Deputy, it may be better to refer it to the board, for the reasons he has outlined and have them considered at length. It may be better to await a report from the board on the matter prior to initiating legislation if it is deemed necessary.
This is very important point. The Minister accepts its importance and also accepts that it requires attention. The purpose of the Bill is to make decisions now. The matter is hardly so complicated that we must wait for the Pensions Board to establish a committee meeting to consider the matter, to tell the Minister of its views so that he can then decide what to do. It is like reverting to the Dáil being governed by a committee that is not a committee of the Dáil.
This technical issue needs to be examined; it is an important issue. It is also important that issues such as this are resolved as amendments are proposed to the Bill. Perhaps the Minister will consider the issue for Report Stage. He can obtain the views of the Pensions Board in the meantime but it is important that he make proposals at that time.
I have strong views on this matter. As far as we as legislators are concerned, members' contributions are everything and our concern should be to protect them. This is what the Bill and the amendments are about. There have been too many cases of predators and companies engaged in asset stripping of surpluses made up of workers' contributions. It is deferred pay for them. I do not want to see anybody else walking away it. If we cannot get a commitment that this matter will be considered between now and Report Stage I will press the amendment.
It is the Deputy's prerogative to press amendments; I do not intend to interfere with his democratic rights. I accept that members' contributions are an important issue. We all have the same objective — that is, to protect the interests of such people. However, our advice is that it is a broader issue than dealing with it is in this context. There are other implications and it may be advisable to discuss the matter and obtain a reasonably quick response from the Pensions Board. Unfortunately we will not have it for Report Stage. In view of this it might be better, as I suggested earlier, to introduce specific legislation which could be dealt with relatively quickly on the basis of recommendations from the board.
The matter was raised with the board previously and it will pursue it. We cannot wait indefinitely for the report or for the Report Stage. I do not disagree with the sentiments expressed by the Deputies and I have no difficulty with the principle raised. The question is whether it is better to deal with it by an amendment such as this or on the basis of the examination of the schemes by the Pensions Bord and its recommendations.
We expect the Department and the Minister to have the knowledge to deal with the issue and to consult with the Pensions Board. We do not want the Minister just to pass matters to the board; we could easily go to the board ourselves. It is important that the Department is able to give a view, although it can take into consideration the Pensions Board's views. Perhaps the Minister will take the advice that is available and see if the matter can be dealt with before the Report Stage.
I will do that if we can get the relevant information on time and if we do not have to delay the passage of the Bill. Notwithstanding what one might wish to do at a particular time, one has to be careful. Discretion may be the better part of valour. Having served in ministerial office, Deputies Woods and Joe Walsh will know the implications of the matter and the need to get the fullest advice before reaching a decision. Every effort is being made to get the advice quickly.
We are agreed this is an important measure. The landmark Barber decision stated clearly that the contributions of pension scheme members was their property. We do not want to have legislation which would allow that property to be confiscated. I accept what the Minister of State has said, but I will put down this amendment again on Report Stage and I will look forward to the views of the Pensions Board. If this Bill is to take us into the next century this amendment should be fully dealt with.
There are hundreds of thousands of members of pension schemes in this country. There have been problems in other countries. In the UK last year an unscrupulous individual walked off with millions of workers' money. We do not want that to happen here. The Minister of State has agreed to take advice on the matter; we will consider it on Report Stage to see if we can incorporate a measure in the Bill to cover such an eventuality.
Amendment, by leave, withdrawn.
Section 27 deleted.
NEW SECTION.
I move amendment No. 21:
In page 16, before section 28, to insert the following new section:
28.—The Principal Act is hereby amended by the substitution for section 74 of the following section:
74. (1) (a) Where a rule or term of an agreement or order to which this section applies does not comply with the principle of equal treatment, it shall, to the extent that it does not so comply, be rendered null and void with effect from the 17th day of May, 1990, and the more favourable treatment accorded by it to persons of the one sex shall be accorded by it to persons of the other sex in respect of periods of employment to which that rule or term applies up to the date on which the rule or term is amended to comply with the principle of equal treatment.
(b) This section applies to
(i) a collective agreement,
(ii) an employment regulation order within the meaning of Part IV of the Act of 1946, and
(iii) a registered employment agreement within the meaning of Part III of the Act of 1946 registered in the Register of Employment Agreements.
(2) Where more favourable treatment is accorded to any persons under an agreement or order by virtue of subsection (1) the employer shall take such measures as are necessary to give effect to that subsection.
(3) Where any rule or term of an agreement or order is rendered null and void by subsection (1), nothing in this Part shall affect any rights accrued or obligations incurred under that rule or term relating to a period before the 17th day of May, 1990
(a) during the period beginning on the 17th day of May, 1990, and ending on the 31st day of December, 1998, or, in the case of retirement ages, the 31st day of December, 2017, or
(b) in respect of members who cease to be in employment to which that rule or term applies before or during the period referred to in paragraph (a)..'.".
Amendment agreed to.
Section 28 deleted.
NEW SECTION.
I move amendment No. 22:
In page 17, before section 29, to insert the following new section:
29.—The Principal Act is hereby amended by the insertion after section 74 of the following section:
74A.—(1) Where a contract of employment contains a term (whether expressed or implied) which does not comply with the principle of equal treatment, the term shall, to the extent that it does not so comply, be rendered null and void with effect from the 17th day of May, 1990, and the more favourable treatment accorded by it to persons of the one sex shall be accorded by it to persons of the other sex in respect of periods of employment to which that term applies up to the date on which the term is amended to comply with the principle of equal treatment.
(2) Where more favourable treatment is accorded to any persons under a term (whether expressed or implied) of a contract of employment by virtue of subsection (1), the employer shall take such measures as are necessary to give effect to that subsection.
(3) Where any term (whether expressed or implied) of a contract of employment is rendered null and void by subsection (1), nothing in this Part shall effect any rights accrued or obligations incurred under that term relating to a period before the 17th day of May, 1990—
(a) during the period beginning on the 17th day of May, 1990, and ending on the 31st day of December, 1998, or, in the case of retirement ages, the 31st day of December, 2017, or
(b) in respect of members who cease to be in employment to which that term applies before or during the period referred to in paragraph (a).
Amendment agreed to.
Section 29 deleted.
Sections 30 to 32, inclusive, agreed to.