Dáil Éireann Debate, Tuesday - 21 January 2014
336. Deputy Michael McGrath asked the Minister for Social Protection the position regarding deferred pensions of individuals in the context of pension schemes in difficulty under the Social Welfare and Pensions (No. 2) Act 2013; and if she will make a statement on the matter. [2386/14]
View answerThe Social Welfare and Pensions (No.2) Act 2013 amended the Pensions Act and changes the manner in which the assets of a defined benefit pension scheme are distributed in the event of the wind up of a pension scheme. It also extended the options available to trustees in any consideration of a restructure of scheme benefits under section 50 of the Pensions Act.
The change to the wind up rules provided for the application of different wind up rules depending on whether the employer is solvent or insolvent. This change enhanced the priority of deferred scheme member’s benefits in the event of the wind up of a pension scheme.
Prior to the recent change to the Pensions Act, the trustees of a pensions scheme could restructure active and deferred scheme member’s benefits and post retirement increases in pension benefits. The change to section 50 of the Pensions Act extends the categories of benefits which can be considered in a restructure of scheme benefits to include a portion of pensioner benefits. This change essentially provides for the sharing of the risk of scheme underfunding across all scheme members.
Any consideration of a restructure of pension scheme benefits under section 50 of the Pensions Act must comply with the provisions in the Act and with guidance issued by the Pensions Board. This guidance makes provision for the notification of all scheme members in advance of any application to the Pensions Board to restructure scheme benefits. In such circumstances, scheme members will have at least one month to make a submission to the trustees of the scheme in relation to such a proposal. The Pensions Board must be satisfied that all the provisions in the guidance are complied with before the Board will consider issuing a notice to restructure scheme benefits.
The issue of how these changes might be applied will be a matter for the trustees of the scheme who are required under trust law to act in the best interests of all scheme beneficiaries.
