I was asked whether I would commit to supporting a Fianna Fáil Bill that had not been published. I will consider it, once I have seen the Bill, if it has even been drafted.
If the amendment tabled was in order, the most striking thing to me is the first line, which states a solvent firm shall not be allowed to close a defined benefit pension scheme, except in certain circumstances. Under Irish law, pension schemes are a trust and firms do not close down pension schemes. They may act in such a way that causes them to be closed, but it is the trustees who close a scheme. Even if the amendment had been in order, it would have fallen and probably been ineffectual.
Whatever we do in the space, it is important that we understand the effects and do not do something that does no good. It is good to be well meaning, but there is not much point in being well meaning if what one is trying to do is ineffectual. One definitely does not want make things worse. We always debate two laws when we are in a Legislature, that is, the law in front of us and the law of unintended consequences. We all know how they can pan out. In Ireland occupational schemes are generally set up under a trust and maintained by an employer on a voluntary basis. The trustees and rules of the scheme differ from one to another and, like any contractual arrangement, reflect the level of obligations of the parts involved. While the Pensions Act provides for a frame for the regulation and supervision of occupational pension schemes, it does not impose any requirement on employers to fund scheme benefits or maintain an existing scheme and never has.
These matters have been considered during comprehensive reviews of the pension system in Ireland. The introduction of a debt on the employer would raise a range of issues and possible consequences for defined benefit schemes, some of which might not be beneficial for the members. It is not clear whether a change in the law could be applied to existing schemes, as well as new ones. It is also not clear whether any change in the law could apply to existing deficits that have been accrued over time, as opposed to future ones; therefore, there is a risk that any change could be ineffectual.
There are strong arguments both for and against the introduction of an employer obligation. While such an obligation may seem to provide stability and certainty for scheme members, it may result in less desirable outcomes such as prompting well funded schemes to wind up to avoid the new obligations being imposed on them, thus making the law counterproductive, threatening the company's financial stability and, in some circumstances, rendering employers insolvent. When one has solvent companies with insolvent pension schemes attached to them, there is a risk that if one gets it wrong, one could make the company insolvent and the consequence is the employees lose their jobs and probably end up on statutory redundancy payments or have their pay and terms and conditions diminished as a result. It would also impact in that case on the creditors - people who are owed money by the company, perhaps a small business or a professional who did some work and is waiting for the bill to be paid - and, of course, it could have an impact on shareholders and shareholder value. Shareholders are not always billionaires. Sometimes the shareholders could be somebody's else pension fund. It could be the credit union or an individual's savings. The measure could also impact in other ways.
It is also not clear how provisions such as this would impact on multi-employer pension funds, of which there are many. There are lots of pension funds that have a few employers. One could ask what would happen if some of the employers were insolvent and others were not? Have the 15 Members who tabled the amendment considered these matters and what are their answers to these questions? I am interested to know. If anybody wants to write to me with answers to them, I will be happy to read them.
I note that the statement issued by Independent News & Media yesterday states it is not and never has been the intention of Independent News & Media to renege on the agreement with the pension trustees made in 2013. That is an important statement and one to which the company should be held accountable. If such an agreement was made with the trustees in 2013, it should be honoured, if at all possible. In my discussions with the Attorney General, while it is not the basis I might have liked, there is a basis on which the Government could take an interest in the matter, but I hope it will not come to that point and the matter can be resolved as other pension funds have been resolved in discussions between the company and the trustees and also the trade union representatives.
In terms of the Bill as a whole, I thank the Senators for allowing the speedy passage of the Social Welfare Bill. It involves a €300 million package of welfare changes benefiting approximately 1.5 million people, with some special changes of benefit to rural communities, people who are self-employed in extending social insurance to them, in allowing lone parents who work to keep more of the money they earn and also some important changes for people going back to education or getting involved in enterprise. I hope it is the first of a number of social welfare Bills that I will have the privilege to bring through this House. I thank Senators for allowing it to pass before the recess in order that we can begin to implement the measures in January. The first will be the disregard for lone parents, allowing people to access the back to work enterprise allowance after nine months in receipt of social welfare payments, as opposed to 12 months, and the changes for young jobseekers who are homeless, in particular, which I will now be able to sign into law to come into effect in the first week in January, which I am happy to be able to do.
I also thank the officials of my Department for the work they have done on the Bill for weeks, ever since budget day, and even before it, and also the staff of the Houses of the Oireachtas for all the work they have to do in organising these sessions, including processing Committee Stage amendments and other work.
