Dáil Éireann díospóireacht -
Wednesday, 10 May 2000

Vol. 518 No. 6

Written Answers. - Pension Provisions.

Nora Owen

Ceist:

432 Mrs. Owen asked the Minister for Social, Community and Family Affairs the reason a suggested, but highly unlikely and unsubstantiated, threat to the solvency of some pension schemes is accepted by his Department as a valid excuse for not granting a statutory right to the preservation and revaluation of pension benefits earned in respect of pre-1991 service for private sector occupational pension scheme early leavers; if he will quantify the hardship this decision has caused to those people who were compelled to join these schemes; and if he will make a statement on the matter. [12880/00]

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

I refer the Deputy to my reply to Question No. 196 of 23 February last.

The Pensions Board considered this issue in their report on the National Pensions Policy Initiative in 1998. The board concluded that to extend the preservation of benefits requirements to all pre-1991 service could call into question the solvency of some occupational pension schemes and, therefore, recommended that preservation of benefits for pre-1991 service should be introduced by 1 January 2001, revaluation of such benefits by 1 January 2006 and that funding standards in respect of these should be fully met by 2011 – for employees leaving schemes after 1 January 2001.

The Pensions Board's concern regarding the potential solvency implications of placing additional and unplanned costs on schemes is reflected in the recommendation that schemes be given ten years to achieve funding for these increased costs. I am satisfied that the Pensions Board took all relevant factors into account in arriving at its recommendation not to extend the preservation requirements to all pre-1991 service and, as I indicated in my earlier reply, I take the view that in arriving at its conclusion the board struck a fair balance between the rights of pension scheme members and potential solvency implications for schemes.

I propose to give effect to the board's recommendations in this area in the new pensions Bill which I plan to publish this year.