Aengus Ó Snodaigh (Dublin South Central, Sinn Fein) | Oireachtas source

I move amendment No. 19:

In page 15, between lines 39 and 40, to insert the following:
“11. Section 50 of the Principal Act is amended by inserting a new subsection (1A) as follows—“(1A) The Pensions Board shall not direct the trustees of a pension scheme to reduce the benefits of current and former scheme members and/or post-retirement increases in benefits for pensioner members where a sponsoring company or its parent company have the financial capacity to meet the under-funding in the scheme without precipitating wage cuts or redundancies.”.”.

Members already had a debate earlier on some of the concepts contained within my amendment and that of Deputy O'Dea when they discussed the duties of the sponsoring company or its parent body, in this case to ensure the trustees of a pension scheme would not reduce the benefits of current and former scheme members or post-retirement increases in benefits for pensioner members or both, where a sponsoring company or its parent company have the financial capacity to meet such duties. This amendment is tied to the earlier discussion, when members went through its main points. I believe one should ensure that no company, whether it is a subsidiary or a singular company, should renege on its responsibilities to its pensioners, whether they be active or future pensioners, if such a company has the capacity to pay. In the earlier amendment, I was careful in my wording to specify companies with positive net revenues, which means one would not be threatening existing jobs and the associated pay and conditions. In essence, if such companies are profitable or are making major returns to their parent company or are investing in future plants that are not tied to the existing workforce, this means they are in a positive revenue position and their responsibilities and commitments they made to the workers should be met.

In its submission, the Irish Senior Citizens Parliament said the Bill must not facilitate viable and profitable companies to renege on their legal obligations to fund pensions. It also said that essential safeguards are required to prevent companies closing or restructuring schemes other than in situations of gross insolvency.

There is a general concern that the current climate would be used by certain companies to evade their responsibilities under these schemes or use these circumstances to threaten job losses, even though the companies may be profitable. There is a concern they will close schemes or force closures just because, for accountancy or other purposes, a DC scheme looks better on the books than a DB scheme. Such companies have a responsibility regardless of whether they decided to set up the scheme in the first place or whether it was a historical scheme they inherited when they took over a company. They did so in the knowledge they would have to pay and there was always a possibility that, for schemes that were set up quite a long time ago, the length of time people were surviving after retirement and thus starting to enjoy a pension would extend. People are living longer in general so therefore pension pots need to be increased. It has not been today or yesterday that life expectancy has increased in Ireland. It has happened gradually over time. The problem is these companies did not make the required adjustments to their pension funds. In addition, perhaps governments did not raise the matter with them or force them to make such adjustments. We are where we are, but even in these stricken times, no company should be allowed to evade its responsibilities at this stage. Companies should use part of the profits they retain or repatriate to a parent company to ensure the pension scheme required for a defined benefit scheme is solvent and can continue.