Questions for Social Protection

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Dáil Issues, Social Welfare

To ask the Tánaiste and Minister for Social Protection the discussions she has had with the Department of Jobs, Enterprise and Innovation in order to deal with the way pensioners can get access to the State’s industrial relations machinery when their retirement income is being altered, an issue which she has acknowledged needs to be addressed. – Clare Daly.

Question No: 36 Ref No: 4906/15

To ask the Tánaiste and Minister for Social Protection the discussions she has had with the Department of Jobs, Enterprise and Innovation in order to deal with the way pensioners can get access to the State’s industrial relations machinery when their retirement income is being altered, an issue which she has acknowledged needs to be addressed.
– Clare Daly.
* For ORAL answer on Thursday, 5th February, 2015.

R E P L Y
I am glad to say that I have approved measures to facilitate engagement between the trustees of a pension scheme and groups representing the interests of pensioner and deferred scheme members. I recently signed the Occupational Pensions Schemes (Section 50 and 50B) (Amendments) Regulations, 2015 and approved Pensions Authority guidance to facilitate this change.
The change to regulations will require the Pensions Authority to notify groups representing the interests of pensioner and deferred scheme members in situations where the Pensions Authority is proposing to issue a unilateral direction under section 50 of the Pensions Act to restructure scheme benefits or to wind up a pension scheme under section 50B. This requirement will afford the representative group an opportunity to make a submission to the Pensions Authority in relation to such proposals. The Regulations also give the representative group the right to appeal such a direction by the Pensions Authority to the High Court on a point of law.
I also approved an amendment to guidance issued by the Pensions Authority on this matter. This change to guidance will require the trustees of a pension scheme to notify groups representing the interest of scheme members of proposals by the trustees of a defined benefit pension scheme to issue a direction under section 50 of the Pensions Act to restructure scheme benefits. This requirement will afford the representative group an opportunity to make a submission to the trustees of a pension scheme in relation to proposals to restructure scheme benefits.

These changes will facilitate engagement between groups representing the interests of pensioner and deferred scheme members and the Pension Authority and the trustees of a pension scheme.
The question of whether it is appropriate that groups representing the interests of pensioners and deferred scheme members have access to the State’s industrial relations machinery in pursuing pension scheme matter has been raised for consideration with the Minister for Jobs, Enterprise and Innovation and officials of both Departments have met to discuss this matter. It is acknowledged that the industrial relations system in Ireland is voluntary in nature both as regards access to the Labour Relations Commission and the Labour Court. Any change to that principle which would put in place a mandated right to be part of the process would alter fundamentally the conduct of industrial relations.

ORAL question for answer on 05/02/2015 :
To ask the Tánaiste and Minister for Social Protection her views on amending section 50 of the Pensions Act 1990, as amended by section 35 of the Social Welfare and Pensions Act 2012, in order to offer more protection to employees against reductions in their pension entitlements, in view of the growing number of cases like IASS and Tara Mines pensioners experiencing pension cuts when their former employers are not in financial difficulty; and if she will make a statement on the matter. – Clare Daly.

Question No: 52 Ref No: 4905/15

To ask the Tánaiste and Minister for Social Protection her views on amending section 50 of the Pensions Act 1990, as amended by section 35 of the Social Welfare and Pensions Act 2012, in order to offer more protection to employees against reductions in their pension entitlements, in view of the growing number of cases like IASS and Tara Mines pensioners experiencing pension cuts when their former employers are not in financial difficulty; and if she will make a statement on the matter.
– Clare Daly.
* For ORAL answer on Thursday, 5th February, 2015.

R E P L Y
Defined benefit pension schemes in Ireland are, in general, set up under trust. The trustees of such pension schemes have a fiduciary duty to act in the best interest of all scheme members.
Section 50 of the Pensions Act makes provision for the restructuring of a defined benefit pension scheme where the scheme fails to comply with the Funding Standard. The Pensions Authority can either unilaterally or on an application from the trustees of the scheme issue a direction to the trustees of a scheme to restructure scheme benefits. Such a direction by the Pensions Authority only facilitates a restructuring of benefits which is designed to enable the scheme satisfy the Funding Standard.
All directions issued by the Pensions Authority to date have been as a result of an application to the Authority by the trustees of a scheme. Before the trustees make such an application, they must consult with the employer, with the scheme members, with any person receiving benefits from the scheme and with the authorised trade union representing scheme members in advance of an application to the Pensions Authority. The Pensions Authority has discretion as to whether or not to issue a direction following an application by the trustees of a scheme.
The changes made to section 50 of the Pensions Act in recent years essentially provide for the sharing of the risk of scheme underfunding across all scheme members. The issue of how these changes might be applied is a matter for the trustees of a scheme who are required under trust law to act in the best interests of all scheme beneficiaries.
At the end of 2013, the Annual Report of the Pensions Authority indicated that there were 933 defined benefit pension schemes subject to the Funding Standard. The Pensions Authority has issued a section 50 direction in respect of 11% of these schemes. In the majority of applications, the restructuring of scheme benefits related to an adjustment of future increases in benefit.
While I do not plan to bring forward amendments to section 50 of the Pensions Act at this time, I will continue to monitor its application.