I propose to take Questions Nos. 793 and 794 together.
Defined benefit (DB) pension schemes are required to comply with the funding standard provision set out in the Pensions Act. This funding standard requires DB pension schemes to maintain sufficient assets to enable them discharge accrued liabilities. Where schemes do not satisfy the Funding Standard, the sponsors/trustees must submit a funding proposal to the Pensions Board to restore full funding within three years.
The Government is very conscious of the pressures on employers sponsoring pension schemes, and scheme trustees, arising from the very significant losses incurred by pension funds over the last year. While 81% of DB pension schemes satisfied the funding standard at the end of 2007, it is estimated that in excess of 90% of DB pension schemes are in deficit at the moment.
As the Deputy is aware, in recognition of the current market difficulties and the challenges facing pension trustees, the Government recently announced a number of short-term measures aimed at easing the pressures felt by many defined benefit schemes. These included:
granting extra time for schemes to formulate funding proposals;
granting flexibility to the Pensions Board to allow longer periods (over 10 years) for recovery plans in appropriate circumstances;
enabling the Board to allow the term of a replacement recovery plan to extend beyond the end date of the original plan in certain circumstances; and
enabling the Board to take into account voluntary employer guarantees in approving recovery plans.
I believe that these measures will assist schemes currently in difficulty and will help to ensure the best outcomes for the scheme members themselves.
In addition, the Government is currently considering a number of options in relation to the ongoing security of occupational pensions. Any decisions in this regard will be made in the context of the National Pensions Framework which will be finalised shortly.