Dáil Éireann Debate, Thursday - 5 March 2009
15 Deputy Joanna Tuffy asked the Minister for Social and Family Affairs the discussions and correspondence between her Department and the European Commission in relation to Ireland’s compliance with Directive 80/987/EEC. [9292/09]
View answer17 Deputy Damien English asked the Minister for Social and Family Affairs her plans to introduce a pensions protection fund to provide protection for defined benefit scheme members in the event that a scheme is wound up with insufficient resources; and if she will make a statement on the matter. [9163/09]
View answer23 Deputy Ciarán Lynch asked the Minister for Social and Family Affairs if she has come to a decision on the possibility of applying any shortfall from the minimum funding standard in respect of a defined benefit pension scheme as a corporate debt on the company concerned. [9289/09]
View answer24 Deputy Jack Wall asked the Minister for Social and Family Affairs the steps she is taking to improve pension security for members of defined benefit schemes in the private sector. [9285/09]
View answer29 Deputy Ciarán Lynch asked the Minister for Social and Family Affairs if she has come to a decision on introducing a pension protection fund to underpin pension security for members of defined benefit schemes when their company becomes insolvent. [9290/09]
View answer33 Deputy Michael D. Higgins asked the Minister for Social and Family Affairs if she is satisfied with the level of enforcement of the minimum funding standard in respect of defined benefit pensions. [9288/09]
View answer45 Deputy Michael D. Higgins asked the Minister for Social and Family Affairs the number of defined benefit pension schemes that fail the minimum funding standard; and the number of these that are below 25% of the standard, 50% of the standard, and 75% of the standard respectively. [9287/09]
View answer50 Deputy Brian O’Shea asked the Minister for Social and Family Affairs the action she is taking to ensure that the pension benefits of workers at a company (details supplied) are secure. [9293/09]
View answer71 Deputy Brian O’Shea asked the Minister for Social and Family Affairs if she is satisfied that Ireland is in full compliance with Directive 80/987/EEC; and her intentions to amend legislation arising from Court of Justice judgment case C/278/05. [9291/09]
View answerI propose to take Questions Nos. 15, 17, 23, 24, 29, 33, 45, 50 and 71 together.
Under the Pensions Act, defined benefit pension schemes must meet a minimum funding standard which requires that schemes maintain sufficient assets to enable them discharge accrued liabilities in the event of the scheme winding up. Where schemes do not satisfy the Funding Standard, the sponsors/trustees must submit a funding proposal to the Pensions Board to restore full funding within three years. The Pensions Board can allow a scheme up to ten years to meet the standard in certain circumstances.
There are currently 1,355 defined benefit schemes subject to the funding standard. It is estimated that in excess of 90% of defined benefits pension scheme are in deficit. However, the full extent of the level of under-funding will not be fully apparent until all schemes carry out their next actuarial assessment and report the results to the Pensions Board.
The Government is very conscious of the pressures on both sponsoring employers and pension scheme trustees, arising from the very significant losses incurred by pension funds over the last year. We are anxious to ensure, in so far as we can, that those involved have sufficient time and space to fully assess the implications of the current difficulties for their schemes and the remedial action they can take.
The Government is continuing to consider the issues in relation to both the maintenance of the funding standard and the wider issue of future security of the supplementary pensions sector.
Indeed, we recently implemented a number of short-term measures to ease the pressures currently being felt by many pension funds. Those measures include—
The granting of extra time for schemes to formulate funding proposals.
Granting flexibility to the Pensions Board to allow longer periods (over 10 years) for recovery plans in appropriate circumstances;
Enabling the Board to allow the term of a replacement recovery plan to extend beyond the end date of the original plan in certain circumstances; and
Enabling the Board to take into account voluntary employer guarantees in approving recovery plans.
To ensure that these concessions are not seen as a weakening of supervision arrangements, the Pensions Board will not accept recovery plans which do not demonstrate an appropriate investment approach.
I believe that these measures will help all schemes currently in difficulty and will help to ensure the best outcomes for the scheme members themselves.
