Clare Daly (Dublin North, Socialist Party) | Oireachtas source

The Minister has not sufficiently addressed the issue we are seeking to address in our amendment. The legislation clearly defines the State's responsibility in cases of double insolvency and guarantees certain benefits to scheme members in such cases. The guarantee in this regard is not adequate, but that is an issue for discussion under later amendments. Our amendment No. 3 is seeking to do something analogous in terms of defining an employer's responsibility in cases where the scheme, but not he company itself, is in trouble.

This provision is necessary because we have seen several examples of employers exploiting the grey area that exists in this regard. Our intention is to ensure that such exploitation does not continue under the new legislation. What we are discussing here are healthy companies which can afford to pay. There are few, if any, new defined benefit schemes opening up, so these provisions could not be said to raise a deterrent in that regard. As the Minister said, there was no statutory obligation on these companies to set up these schemes. They engaged voluntarily in a commitment, often as part of the contract of employment with the members of this scheme. That guarantee or promise was that workers who paid in over many years - often over a lifetime of work - would be guaranteed an outcome at the end of it. Now, however, the rug is being pulled from under them in some cases. To reiterate, we are talking about contractual obligations into which employers entered freely.

We are not the only ones arguing this point. The High Court stated in the Commercial Court case regarding Aer Lingus and the IAASS scheme that there was a clearly defined contingent liability on the company in regard to its pension commitments. We are seeking to build that into the legislation. The Pensions Board itself has adjudicated that FRS 17 does not replace the statutory obligation on the employer.

The discrepancy and lack of legal foundation is causing the problems in the first place. We must address it and if it is not done in the way some of us are proposing, because we are all trying to do the same thing, the Minister must return with something much firmer to address it. Decisions to take money are being made by companies which are healthy companies. The ESB is one example. It was quite clear it could have stepped up to the mark. Thankfully, it has now decided to do that, but the country was at a standstill in anticipation of whether it would be resolved. There are currently approximately 15,000 members of the airport pension schemes who are similarly affected by some of these issues. Due to Pensions Board adjudications and High Court rulings regarding this matter being a contingent liability, it is a case of introducing legislation now to bring that on stream. If we do not do that, who will foot the bill? It is either the pensioners, which is unacceptable, the members of the scheme or the State. As Deputy Ó Snodaigh said, it will just pave the way for more cases like Waterford Wedgwood and EMI, which nobody wants. This should be an opportunity to sort out the grey area.