Dáil Questions: Pensions

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Dáil Work, Oral Questions, Social Welfare

I asked Joan Burton about changes in pension legislation that allow trustees to reduce the payments to current pensioners and deferred members, but from her answers it seems that she’s going to continue to ignore their plight.

 

QUESTION

To ask the Tánaiste and Minister for Social Protection if she has undertaken analysis of the impact of changes to Section 50 of the Pensions Act allowing trustees to reduce the payments to pensioners.

– Clare Daly.

For ORAL answer on Wednesday, 6th May, 2015.

Ref No:  17327/15

REPLY

Section 50 of the Pensions Act was amended in 2009 and again in 2013.  These changes were designed to spread the risk of scheme underfunding across all scheme members and beneficiaries in any consideration of an application by the trustees of the scheme to restructure scheme benefits.  It is a matter for the trustees of a scheme, who are required under trust law to act in the best interests of all scheme members, to determine how the provisions in section 50 of the Act might be applied.

The most recent analysis was carried out in November 2014 and indicates that over the period since 2009, there were 106 applications made by the trustees of a defined benefit pensions schemes to the Pensions Authority to restructure scheme benefits.  78% of these applications related to an adjustment to post retirement increases in benefits; 8% did not impact on the benefits of existing pensioners; the remaining 14% of applications adjusted the normal pension age or the lump sum at retirement.  In one case the core pensioner benefits were reduced.

At end of 2014, there were 778 active defined benefit pension schemes subject to the funding requirements of the Pensions Act.  The application of section 50 impacted on less than 14% of these schemes.

While I will continue to monitor the application of section 50 of the Pensions Act on an ongoing basis, I expect that the measures I have put in place will support schemes achieve a sustainable position and decrease the likelihood of recourse to its provisions.


QUESTION

To ask the Tánaiste and Minister for Social Protection her plans to address the serious impact of changes in pensions legislation which allows trustees to reduce the payments to current pensioners and deferred members.

– Clare Daly.

For ORAL answer on Wednesday, 6th May, 2015.

Ref No: 17328-15

To ask the Tánaiste and Minister for Social Protection her views regarding whether she has plans to address the serious impact of changes in pensions legislation allowing trustees to reduce the payments to current pensioners and deferred members.

– Clare Daly.

REPLY

Section 50 of the Pensions Act was amended in 2009 and again in 2013 to assist both the employers and the trustees of defined benefit pension schemes respond to the funding difficulties encountered by many defined benefit pension schemes. These changes provide for the sharing of the risk of scheme underfunding across all scheme members.

It is a matter for the trustees of a scheme, who are required under trust law to act in the best interests of all scheme members, to determine how the provisions in section 50 of the Act might be applied.

I do not plan to bring forward amendments to this section of the Pensions Act at this time but I will continue to monitor the application of this section on an ongoing basis.