Thursday, 20 June 2013

Ceisteanna (3)

Joan Collins

Ceist:

3. Deputy Joan Collins asked the Minister for Public Expenditure and Reform his views on whether the An Post pension scheme and the fact that certain pension scheme trustees may have a conflict of interest between their role as a trustee and executive directors of An Post; and if he will make a statement on the matter. [29625/13]

Amharc ar fhreagra

Freagraí ó Béal (4 píosaí cainte) (Ceist ar Public)

This question is properly for the Minister for Social Protection and the response I am giving is from her Department. The Deputy will appreciate that it would not be appropriate for the Minister for Social Protection to comment on issues arising in regard to a particular pension scheme.

In general, pension schemes in Ireland are established under trust. The trust deed and scheme rules provide for the appointment and responsibilities of the trustees of a scheme. Under trust law, the trustees of a scheme are required at all times to act in the best interest of all scheme members; to act fairly between beneficiaries and to administer the trust in accordance with trust law. A trustee who is negligent, does not act in good faith or breaks the rules of the trust can be sued by the beneficiaries. They can be held personally liable for the entire amount of any loss that has occurred.

The provisions in the Pensions Act build on trust law and sets out in Part VI of the Pensions Act the range of duties and responsibilities of a trustee of a pension scheme, including the general duties of trustees, the qualifications required to be a trustee of a scheme and also makes provision for the training of trustees. The Pensions Act requires the large-funded occupational pension schemes with more than 50 employees and pensioner members to allow members to select or approve the selection by the employer of one or more "member trustees". Conflicts of interests can arise where trustees appointed directly by the employer may include members of the board of the company or senior executives or where a member trustee has discretion under the trust deed and scheme rules in relation to the payment of scheme benefits. A person appointed as a trustee could be in a position where there may be a conflict between their duty as a trustee and their other interests. Their duty as a trustee must prevail when taking decisions. Where a trustee is conscious of a possible conflict of interest it may be necessary, before a decision is taken, to obtain legal, actuarial or other professional advice, as appropriate. Any further questions can be directed to the Minister for Social Protection who has responsibility for occupational and State pensions.

I thank the Minister. It is difficult to respond given that the Minister has indicated that the response to the question came from the Minister for Social Protection.

A few peculiar things happened to the questions I tabled. I had submitted three questions, one priority and two oral. One priority question went to the Department of Social Protection and I was not told about it in accordance with the normal procedures. The priority question was removed and the oral question was put onto the agenda.

Workers in An Post are hugely concerned about the change in the pension fund which has been capped now at 2%. In December 2012 we were told there was a deficit of €320 million if the scheme was wound up on the day in question. We subsequently found out that €80 million more has been put into the pension scheme and that there is now a deficit of €240 million. All the information and examples given to members in a booklet are based on a deficit of €320 million. There is a general feeling that rather than the pension board acting in the interest of members, it is acting more in the interest of the company to deliver cost savings. Questions arise as to how some of the conclusions were reached in terms of the proposals and examples given. The booklet is very hard to read and it is very misleading.

I raised the matter today to put the huge concern on record. There is also considerable concern about deferred pensions. A total of 360,000 people are covered under deferred pensions and questions are being asked as to whether the pensions will be viable in the future. I am a member of the An Post pension scheme so I have an interest in the matter.

I fully understand and appreciate the Deputy’s difficulty. I am sorry that I am not the appropriate person to respond. I have outlined the general law on the legal obligation of trustees, which gives some reassurance to the Deputy. I undertake to bring the Deputy’s direct concerns to the attention of the Minister for Social Protection. I will ask her to reply directly to the Deputy.

I will table a question to the Minister next week.