David Cullinane
Question:540. Deputy David Cullinane asked the Minister for Social Protection the consequences for a pension scheme that fails to submit a funding proposal under section 49 of the Pension Act. [41045/16]
View answerTuesday, 17 January 2017
Questions (540)
Written answers
The Pensions Act requires that trustees arrange for an actuary to carry out a valuation of a defined benefit (DB) pension scheme’s liabilities and assets at regular intervals and submit an actuarial valuation certificate to the Pensions Authority outlining the funding position of the scheme. The date of each scheme valuation must be not later than 3 years after the last date of the previous valuation for that scheme.
If the actuary certifies that the scheme has insufficient assets to satisfy the funding standard set out in the Act, the scheme's trustees must ensure that a funding proposal is prepared and sent to the Pensions Authority with the actuarial funding certificate. The funding proposal must set out measures which will ensure that the scheme could reasonably be expected to satisfy the funding standard at the date of the next actuarial funding certificate or other specified date.
It is essential that any underfunded scheme submits a funding proposal to the Pensions Authority in a timely manner.
Following approval of funding proposals, schemes report to the Pensions Authority on their compliance with such funding proposals on an annual basis .
Where a DB scheme fails to meet the statutory funding standard and fails to agree a funding proposal under section 49 of the Pension Act, Sections 50 and 50B of the Pensions Act, respectively, give the Pensions Authority the power to direct trustees of DB schemes to reduce benefits under a scheme or wind up the scheme.
To date, the Pensions Authority has never had to use Sections 50 and 50B to reduce benefits or wind up a pension scheme.
Under the Pensions Act trustees can be prosecuted or replaced by the High Court for failure to submit a funding proposal to the Authority.
I hope this clarifies the matter for the Deputy.