Dáil Éireann díospóireacht -
Tuesday, 5 Oct 1999

Vol. 508 No. 3

Written Answers - Pension Provisions.

Joe Higgins

Ceist:

309 Mr. Higgins (Dublin West) asked the Minister for Social, Community and Family Affairs if, further to Parliamentary Question No. 86 of 24 June 1999 regarding frozen pensions, his Department will answer letters dated 7 July 1997 and 18 August 1998 in view of the fact he advised in his reply that he is unable to substantiate his claim that all issues raised have been answered. [18933/99]

Joe Higgins

Ceist:

310 Mr. Higgins (Dublin West) asked the Minister for Social, Community and Family Affairs further to Parliamentary Question No. 88 of 24 June 1999 the way in which he can justify reducing pension payments to ordinary workers by over 86 per cent to protect the solvency of pension schemes in certain circumstances. [18934/99]

Joe Higgins

Ceist:

311 Mr. Higgins (Dublin West) asked the Minister for Social, Community and Family Affairs the way in which he can justify making it compulsory for an employee to join an occupational pension scheme while the provision of these schemes by an employer is optional; and the plans, if any, he has to remove this obligation when he introduces the personal retirement savings account scheme. [18935/99]

Joe Higgins

Ceist:

312 Mr. Higgins (Dublin West) asked the Minister for Social, Community and Family Affairs the plans, if any, he has to offer representation to the disenfranchised deferred pension scheme members on any of the State bodies responsible for the governance of pensions, and, if not, the channels of communication open to them to seek redress from the pension industry. [18936/99]

Minister for Social, Community and Family Affairs (Mr. D. Ahern):

It is proposed to take Questions Nos. 309 to 312, inclusive, together.

The issues raised in these are similar to those raised by the Deputy on 24 June 1999, to which I replied as comprehensively as possible. I am satisfied that the Department has already dealt with the correspondence to which the Deputy refers in so far as possible.

In its report Securing Retirement Income, the Pensions Board considered that if a statutory requirement to revalue all pre-1991 service was placed on pension schemes, the additional costs involved for schemes with many deferred pensioners and few current members, could be considerable in percentage of payroll terms and could threaten the solvency of a scheme in certain circumstances.

In relation to the issue of revaluation of deferred benefits for members of occupational pension schemes who left such schemes prior to 1991, when the Pensions Act, 1990, came into effect, the usual position is that leaving service benefits are calculated by reference to the period of scheme membership and salary at the time of leaving and are not subject to revaluation. The Pensions Board examined the issue of early leavers but did not recommend a statutory requirement to revalue all pre-1991 rights. However, the board urged employers to consider the revaluation of such benefits, where people remain members of the scheme, on a voluntary basis. In this regard I do not understand the figure of 86 per cent in the Deputy's question.

The Pensions Board comprises representatives of scheme trustees, scheme members, the pensions industry, the social partners and representatives of Departments and represents the balance of interest between these groups. The Pensions Board is the regulatory authority responsible for the regulation of occupational pension schemes, as set out in the Pensions Act, 1990. However, while pension schemes have to comply with this Act, the schemes themselves are arrangements set up on a voluntary basis between employers and employees and governed in the first instance by the terms of the relevant trust deed, which is overseen by the scheme trustees.

The Pensions Board recommended that it should remain permissible for an employer who is contributing to a pension scheme to have or make it a condition on taking up employment that employees join the pension scheme. The board considered this condition to be essential to avoid the possibility of unscrupulous attempts to tempt people out of employer-sponsored schemes as happened in the United Kingdom for example, where employers were legally prohibited from having scheme membership as a condition of employment. I fully support the pensions board recommendation in this regard. Overall, the objective is to increase the coverage of good occupational schemes, as outlined by the board in its report.

I plan to publish a pensions Bill as early as possible in 2000 which will address many of the outstanding issues in the area of occupational pensions, including the establishment of a pensions ombudsman, which would be of assistance in certain areas of pension disputes.