Dáil Éireann Debate, Thursday - 17 May 2018
239. Deputy John Brady asked the Minister for Employment Affairs and Social Protection if she will meet with representatives of an organisation (details supplied) regarding the closure of the defined benefit scheme at a company; and if she will make a statement on the matter. [21751/18]
Amharc ar fhreagraScheme trustees have duties and responsibilities under trust law, under other relevant legislation and under the Pensions Act, 1990, as amended. The duties of pension scheme trustees include administering the trust in accordance with the law and the terms of the trust deed and rules. Consequently any decisions made by corporate or individual trustees of an occupational pension scheme are governed by the relevant legislation. The provisions of the Pensions Act are enforced through the supervision of the Pensions Authority.
Although the Pensions Authority is under the aegis of my Department, it regulates pension schemes entirely independently of my Department. Therefore, I am not in a position to directly intervene in individual pension schemes and it would not be appropriate for me to meet with unions regarding such schemes.
If scheme members or Deputies have concerns about any such pension scheme they should address queries directly to the Pensions Authority.
Neither I nor the Pensions Authority has the power under legislation to intervene to compel an employer to continue to make contributions to a scheme. Even where a scheme is closed to new members or to future accrual of benefits, the sponsoring employer role continues in relation to that scheme.
Almost all Irish defined benefit schemes have a rule that allows the employer to cease contributions, usually after a notice period. Currently there is no legislative obligation on the employer to make contributions and no further liability on the employer where contributions cease. Neither is there an obligation on the employer to give notice to members or to consult in advance of ceasing contributions.
However, in the case where a restructuring of benefits is proposed, the employer and the trustees of a pension scheme are required to notify scheme members, beneficiaries and the authorised trade unions. Furthermore, changes made to the Occupational Pension Schemes (Section 50 and 50B) Regulations in 2015 require trustees to also notify groups representing the interests of pensioners and deferred scheme members in a scheme in such a situation.
The Roadmap for Pensions Reform, which was published recently, details specific measures that will modernise our pension system. It sets out under Strand 4, ‘Measures to Support the Operation of Defined Benefit Schemes’, that the Government is committed to advancing the Social Welfare, Pensions and Civil Registration Bill 2017. The purpose of this Bill is to respond to the ongoing difficulties in DB schemes and to increase protections for members as well as encouraging employers to ensure that schemes are well funded and managed.
The general scheme of the Bill, which was published in May 2017, contained a number of key measures relating to DB pension schemes. These proposed provisions will ensure that an employer cannot “walk away” at short notice from the pension scheme it is supporting by providing a 12 month notification period where an employer is seeking to cease making contributions to a scheme. The amendments seek a middle road between the current position where employers can abandon DB schemes and full and immediate debt on employer provisions. The measures will act to support existing provisions in the Pensions Act and will provide for further protection for scheme members’ benefits and enhance employer responsibilities for their schemes.
The amendments also provide for more frequent monitoring of the financial position of schemes and will further provide that, where a scheme is in deficit and a funding proposal has not been put in place in a timely manner, the Pensions Authority may direct steps to be taken to ensure that the scheme meets the funding standard.
It is important to note that if this new legislation is enacted, a scheme will have to give a minimum notice period of twelve months before contributions can be stopped. However, it will not prevent a company from ceasing contributions once the minimum notice period is served provided the scheme meets the minimum funding standard.
These provisions are quite technical and complex. Work to finalise them is at an advanced stage and I hope to be in position to bring forward the amendments at Committee Stage at the end of May or early June. With the cooperation of the Oireachtas, the Government intends to pass this legislation before the summer recess.
I hope this clarifies the matter for the Deputy.
