Dáil Éireann Debate, Tuesday - 7 May 2013
125. Deputy Michael McGrath asked the Minister for Finance if Permanent TSB plans to wind up its defined benefit pension scheme; if he will confirm the number of scheme members who would be affected by such a move; and if he will make a statement on the matter. [21160/13]
View answer137. Deputy Michael McGrath asked the Minister for Finance if his approval has been given for the closure of the Permanent TSB defined benefit pension scheme; his views on the company's actions regarding same; and if he will make a statement on the matter. [21223/13]
View answerI propose to take Questions Nos. 125 and 137 together.
As the Deputy will be aware the pension arrangements for the staff of Permanent TSB are a matter for the management of that company and for the trustees of the relevant pension schemes.
I am informed by Permanent TSB that it currently operates 3 defined pension schemes for employees who joined the bank before 2007 and a defined contribution scheme for staff who joined the bank since then. I am informed by the bank that very substantial funding deficits exist in the various defined benefit schemes.
Permanent TSB has advised me that, in response to this significant problem and as part of a review of the overall cost base of the business, it has recently communicated to staff plans to discontinue employer contributions to all the existing defined benefit pension schemes and to commence, in their place, contributions to a new defined contribution pension scheme from 1 June 2013. I am informed by Permanent TSB that there are currently 1,360 staff in defined benefit schemes in Permanent TSB which will be affected by this move. Ultimately it is for the trustees of the defined benefit schemes to decide how the schemes will respond to this development but it will most likely result in the relevant defined benefit schemes being wound up and the assets already accumulated being distributed among the members of the relevant schemes in accordance with the requirements of the Pensions Act. I have been informed that the matter may be referred to the Labour Court but that would be an issue for the various interested parties.
As the Deputy will be aware there is a Relationship Framework in place with Permanent TSB which provides the basis on which the relationship between the Minister and Permanent TSB is governed. Under the terms of the Relationship Framework the bank operates as an independent economic entity and matters such as this fall within the purview of the bank.
I can inform the Deputy that the Minister for Finance has not been asked, and is not required, under the terms of the Relationship Framework to give approval for a wind-up of Permanent TSB's defined benefit pension schemes.
