Dáil Éireann Debate, Tuesday - 28 April 2015
109. Deputy Willie Penrose asked the Tánaiste and Minister for Social Protection if she will take steps to ensure that legislative changes are introduced in order to emphasise employer responsibility for pension schemes, and that it is the employer who should fund future pension protection schemes, as is the case in other European Union countries; and if she will make a statement on the matter. [16842/15]
View answerSection 121 of Pensions Act requires employers who are not operating a pension scheme or who are operating a scheme which limits eligibility for membership to provide access to a Personal Retirement Savings Account.
Defined benefit pension schemes in Ireland are set up and maintained by employers on a voluntary basis. There has never been a statutory obligation on employers under Irish law to contribute to their pension scheme. Rather, when a DB scheme is set up, the level of employer and employee contributions is agreed and established in contract in each schemes Trust Deeds and Rules. The Trust Deeds and Rules differ from scheme to scheme, and as with any contractual situation, reflect the parameters on the level of obligation of the parties involved.
The trustees of a pension scheme are required under the Pensions Act, to maintain sufficient assets in a defined benefit pension scheme to meet the liabilities of the scheme in the event of the wind up of a scheme. Where a scheme fails to meet this requirement, the trustees of the scheme are required to submit a proposal to the Pensions Authority setting out how it is proposed to restore funding to the level required.
The imposition of a debt on an employer or the provision of a pension protection fund has been considered in the context of measures introduced in recent years to support employers and the trustees of defined benefit pension schemes respond to the funding challenges facing many schemes. However, given the uncertainties as to the overall impact and potential for unintended consequences of applying debt on the employer selectively or otherwise, having regard to the small size of the defined benefit sector, and given the administrative complexities and costs associated with a pension protection fund, these measures were not progressed. I am satisfied that the measures put in place in recent years take an approach which will support schemes with funding difficulties to gradually move to more sustainable funding position.
I must acknowledge that employers have, by and large, made great efforts to support and deliver on the pension promise made to scheme members. As you aware, this process is generally managed through dialogue between trustees, employers and members, where efforts are made to reach agreement regarding the steps that must be taken to secure scheme viability. These may include a mix of measures such as increased employer/member contributions, longer working or a restructuring of scheme benefits.
