Dáil Éireann Debate, Tuesday - 12 June 2018
1236. Deputy Tony McLoughlin asked the Minister for Employment Affairs and Social Protection the status of efforts being made to ensure that an association (details supplied) is given an opportunity to represent its members in a way it views is sufficient; if section 50 of the Pensions Act 1990 will be amended in this regard; and if she will make a statement on the matter. [24876/18]
View answerThe governance of an individual pension scheme is generally a matter for the scheme trustees. Scheme trustees have duties and responsibilities under trust law, under other relevant legislation and under the Pensions Act 1990, as amended. The duties of pension scheme trustees include administering the trust in accordance with the law and the terms of the trust deed and rules. It is important to note that pension scheme trustees have no function in negotiating improved benefits and entitlements for members under a pension scheme. Consequently any decisions made by corporate or individual trustees of an occupational pension scheme are governed by the relevant legislation. The provisions of the Pensions Act are enforced through the supervision of the Pensions Authority. The Pensions Authority makes information available on its website to assist members, employers and trustees understand the procedures for member participation in the selection of trustees.
If the funding of a pension scheme is not sufficient to satisfy the Funding Standard, the trustees may apply to the Pensions Authority for a direction under section 50 of the Pensions Act 1990. Under such an order, accrued benefits relating to members’ past service can be reduced. Prior to making an application to the Pensions Authority, trustees must have undertaken a comprehensive review of the scheme with a view to the long term stability and sustainability of the scheme. Before making an application for a section 50 direction, the trustees must notify in writing, all members of the scheme and any other person in receipt of benefits under the scheme, and also notify any authorised trade union representing members, or any representative group that meets certain requirements, of the proposed reductions. This notification must include the circumstances of the Section 50 application, and the proposed reductions, including general illustrations of their effect. It is important to note that all pension scheme members, not just pensioners, have one month to make written observations to trustees on proposed section 50 applications to the Pensions Authority. Trustees must consider these observations before making an application to the Pensions Authority.
The provisions in section 50 of the Pensions Act have been reviewed on a number of occasions in recent years. Changes to this section of the Act were made in 2009 and again in 2013. The Social Welfare and Pensions Act 2013 amended section 50 of the Act to broaden the options available to the trustees of a pension scheme when considering a restructure of scheme benefits. These changes were designed to spread the risk of scheme underfunding across all scheme members and beneficiaries in any consideration of an application by the trustees of the scheme to restructure scheme benefits. It is a matter for the trustees of a scheme, who are required under trust law to act in the best interests of all scheme members, to determine how the provisions in section 50 of the Act might be applied.
Officials of my Department and I have met with association concerned and have explained how it is a legal requirement under the Pensions Act 1990, as amended, that trustees must act in the best interests of all scheme members whether active, deferred, or retired. We have also explained that if any individual has evidence that pension scheme trustees are not acting in the best interests of all members they should complain to the scheme trustees in the first instance. If the complainant is not satisfied with the trustees’ reply they should raise their concerns with the Pensions Authority.
I believe that current legislation allows for the best interests of all pension scheme members to be taken into account by pension scheme trustees. Therefore I currently have no plans to amend the Pensions Act in this regard.
I hope this clarifies the matter for the Deputy.
