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Defined Benefit Pension Schemes

Dáil Éireann Debate, Tuesday - 6 November 2018

Tuesday, 6 November 2018

Questions (1101)

Clare Daly

Question:

1101. Deputy Clare Daly asked the Minister for Employment Affairs and Social Protection the status of the Social Welfare, Pensions and Civil Registration Bill 2017, specifically the proposed amendments to the Bill dealing with defined benefit pension schemes; and the likely date on which the Bill will be taken on Committee Stage in the Houses of the Oireachtas. [45340/18]

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Written answers

As the Deputy is aware, the General Scheme of the Social Welfare and Pensions Bill 2017 (now the Social Welfare, Pensions and Civil Registration Bill 2017) was published in May 2017 and contained a number of key measures relating to defined benefit pension schemes. These proposed provisions will ensure that an employer cannot “walk away” at short notice from the pension scheme it is supporting. They seek a middle road between the current position where employers can abandon DB schemes and full and immediate debt on employer provisions. The measures will act to support existing provisions in the Pensions Act and will provide for further protection for scheme members’ benefits and enhance employer responsibilities for their schemes.

The Second Stage of the Social Welfare, Pensions and Civil Registration Bill 2017 concluded on 4 October 2017.

In July 2018, Government approval was obtained to draft additional provisions to be included in the Bill at Committee Stage including provisions relating to defined benefit schemes.

A key priority for the Government is to provide additional protections for scheme members’ pension benefits. However, it is essential that any new measures recognise the current pension landscape in Ireland so that a balanced, proportionate approach is developed and that unintended negative consequences do not arise.

Under existing pensions law, there is no legislative obligation on the employer to make contributions to a scheme. However, the provisions of this Bill will introduce a new regime into the Pensions Act 1990 which will, amongst other things, enable the Pensions Authority to make a funding obligation direction specifying payments to be made by a sponsoring employer to the pension scheme where no agreement is reached, within a specified time period, to resolve a funding deficit.

The defined benefit pension provisions are very technical and involve complex policy issues. In order to achieve a resilient solution it has been necessary to consult with and obtain numerous legal advices from the Office of the Attorney General on various aspects of this policy. When these matters have been resolved and amendments approved by Government, an early date for Committee Stage will be requested.

I hope this clarifies the matter for the Deputy.

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