Given that this issue affects 15,000 people in the Irish airlines superannuation scheme, the least the Tánaiste could have done was stay to engage in some kind of meaningful debate about what is going on.
I spoke earlier about the unfair pensions regime in this country. The Government promised to reform it but is has backed off on those reforms. We saw that happening last year. The Labour Party element of the Government, in particular, promised to introduce serious reform, but the Government has backed off on that. The pension levy was increased as a direct result of the shortfall in the funding that was expected to be raised from pension changes. Many people on very small private pensions have been paying a pension levy of 0.6%. This makes a huge difference to their pension benefits. The shortfall I mentioned, which resulted from the Government's failure to introduce the promised reforms last year, meant that the pension levy had to be hiked up by a further 0.15% for this year and next year. That is further compounding the unfairness of the pensions regime.
The other major pensions problem in this country is the regulatory framework that surrounds pensions. As a result of the Social Welfare and Pensions Act 2009, which made provision for the priorities in pension schemes to be reordered, existing pensioners - those who are in payment - stand to lose between 10% and 20% of their pensions. Rather than addressing this issue by making savings at the top end, where vast pension pots are being subsidised by everybody in this country, we are overseeing a situation in which people on small private pensions are losing substantial portions of those pensions. The Act that was introduced in 2009 by the Fianna Fáil-led Government gives the green light to solvent companies to walk away from their pension commitments. The current Government cannot explain its position by referring to what its predecessor did because the provision in question was copperfastened in December of last year by the Social Welfare and Pensions (No. 2) Act 2013. The Government is telling companies that have very healthy balance sheets, are doing very well and have very strong outlooks for the future that it is happy for them to walk away from their pension commitments and the undertakings they gave to their workers and pensioners.
I regret the Tánaiste is not in the Chamber, but I must pose my next question anyway. On what basis does the Government believe it is acceptable for a solvent company to walk away from its pension commitments, other than being prepared to abandon workers and pensioners who understood they had certain rights? The Government is saying it is okay to forget about them because it will not hold the companies to their commitments. It is an incredible position for the Government to adopt, especially its Labour element.
Earlier, the Minister for Transport, Tourism and Sport, Deputy Donohoe, spoke about feeling the pensioners' pain. That kind of bleeding heart stuff is of no benefit to those who are affected. The Minister and the Tánaiste assert that, somehow, everything is someone else's fault and has nothing to do with them. An attempt is being made by Ministers to hide behind the trustees of the Irish airlines superannuation scheme, IASS, and to claim the latter are at fault. Whatever about this applying in a private company that is far removed from the Government, the Government should set a good example in this case and set down a protective framework for what is a basic element of a worker's rights, namely, the right to a decent pension, especially after having paid into that pension for 35, 40 or more years. This is the situation obtaining with the IASS.
In spite of having owned Aer Lingus until its privatisation and still possessing a 25% shareholding in same and despite the Dublin Airport Authority, DAA, being a semi-State commercial company, the Government has refused to play any role in this debacle, leaving it to the company and the trustees as if the situation had nothing to do with it. The Government has the power to act. It should have told the companies that it was not acceptable for companies that were solvent and doing well to renege on their commitments to their pensioners and employees. The Government should have stated clearly that a company in State ownership should not behave in that way and undermine workers and pensioners' rights. We need the Government to show leadership, not to hide behind the trustees or companies.
There was a protest outside Aer Lingus's EGM this afternoon, particularly by aggrieved deferred pensioners. Can the House imagine if public sector workers, for example teachers, were told that, from today on, they would lose between 40% and 60% of their pensions? Whatever about the protests on the streets today, they would be far larger if an arbitrary decision was taken to slash pensions without any notice or justification. There would be uproar, but that is effectively what the Government is supporting the companies in doing. Having paid into pension schemes and received written contracts and undertakings when they took early retirement packages, people had a legitimate expectation of having their pension benefits preserved, yet the Government is now saying it is okay for State companies to renege on those undertakings. This is not acceptable by any standard.
It was wholly inadequate of the Tánaiste to tell Deputy Clare Daly to bring the serious issues that she raised last week to the Pensions Authority. Serious allegations had been made. The Tánaiste has had a week to look into, verify and take action on them. It is disappointing that she has done nothing. She has passed the buck and told Deputy Clare Daly to do something if she knows about it. When the Deputy brought the matter to the Tánaiste last week, the latter should have acted on it. This is just more washing of hands.
The first amendment in this group requires a full review to be carried out of the implications for the public purse of current Government policy on private pension schemes. If we are telling companies that it is okay for them to renege on their pension commitments, it will have implications for the State's non-contributory pension. The State seems to be saying that it is okay for private companies to do this and that the State will pick up the tab if people end up claiming non-contributory pensions. We need to review this, as it is not acceptable.
Under the principal amendment in the group, a company would not be allowed to close a pension scheme unless it had met 90% of the funding standard. By right, a scheme should meet 100%, given people's contracts, but 90% is a reasonable standard. No company that is solvent and trading successfully should be allowed to close a scheme without ensuring that its members get 90% of what they were promised.
Another amendment relates to an appeals mechanism. Many decisions have been taken arbitrarily, with the Minister, Deputy Donohoe, signing the order on foot of the expert panel's recommendations. Although he stated that he understood how deeply worried people were, he failed to take any action to address the inequality that was being delivered to people.
What the Government is doing with the IASS means that, while its existing pensioners stand to lose out, its deferred pensioners in particular stand to lose a significant amount of what they understood were their retirement benefits. The Minister of State and anyone with any sense know that it is wrong and unfair to treat people in this way. That the Government, a central player, believes it to be all right to sing dumb when people's rights are clearly being trampled is beyond understanding.