I propose to take Questions Nos. 64 and 70 together.
As the Deputy might appreciate, issues involving the pension schemes in relation to the Commercial Semi State companies can be complex. They also involve a range of different stakeholders and are influenced by a number of different factors such as those which impact on the overall value of pension funds. There is also a historical context to the position of these schemes many of which have faced financial challenges over many years.
I would like to take the opportunity to briefly outline the background to some of these issues before highlighting the key factors to be considered in the development of proposals for discretionary pension increases as well as the process by which these proposals are brought forward.
As you now, many of the pension schemes for the Commercial Semi State Bodies experienced a deterioration of their overall financial position during the financial crisis. Difficult measures had to be taken in some cases to ensure their survival. A large number of the schemes are still in deficit.
This means that along with relevant policy considerations, the extent of precedents and consistency with scheme rules, the overall funding position of the relevant pension scheme is one of the most important factors in considering any pension scheme proposals. Any measure which has the potential to negatively impact on the financial health of a pension scheme must be carefully evaluated.
This also applies to proposals for discretionary pension increases. Many of the pension schemes in the Commercial Semi State sector have not had pension increases for this reason. As a result, the understandable desire of retired scheme members for pension increases must be balanced with the overall protection of pension benefits for all members of a pension scheme and with the long term survival of schemes.
Ultimately, if pension increases are not affordable, it can lead to a failure to meet the statutory funding standard, which in turn can trigger the need for more difficult measures to restore the financial position of a pension scheme.
As the key stakeholders involved in considering these proposals, the parent Department along with the relevant scheme trustees and the scheme employer all play an important role in ensuring that the full impact of pension increases on the sustainability of the pension funds is carefully assessed along with all the other policy considerations before proposals are finalised
The normal process by which these requests are advanced involves the parent Government Department under whose aegis responsibility for individual Commercial Semi State Bodies falls considering and approving any changes to pension scheme rules or discretionary benefits.
My Department then considers these proposals when a fully completed set of business case and technical assessment documents are submitted in line with the standard governance requirements. This includes the advice from NewEra. This process applies to all proposals including the RTÉ pension scheme before they are brought forward for my consent.
In relation to your other parliamentary question, the full set of documents have not yet been received by this Department in relation to both the RTÉ scheme and the Dublin Port scheme proposals. As you can appreciate, it can take some effort to assemble and review the full range of technical material required.
Officials in my Department are available to consider these matters once all the necessary financial and actuarial analysis is carried out and the governance requirements have been met.
Overall, while I understand the sensitivity of pension increase matters, the issues involved are not necessarily straightforward and the full impact of proposals have to be considered, not least on the long term viability of schemes.
