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

I wish to make a couple of brief points. The ESB scheme was always a defined benefit scheme.

The IASS scheme was also a defined benefit scheme, but that did not prevent ten years of argument as efforts were made to undermine the benefits to the members of that scheme. The measures undertaken by the company were the subject of years of adjudication in front of the Pensions Board. The recent development in the ESB was a carbon copy of what started in the IASS scheme over ten years ago. That is a strong argument in favour of the need for tighter provision in this part of the legislation. I do not accept that these pension schemes are less likely to wind up. In fact, the IASS proposal is to stop the defined benefit scheme and replace it with a defined contribution scheme. The current scenario is that people who are paying into the scheme will get approximately 30 cent back for every €1 they put in. It is absolutely crazy that they are looking at a retirement pension of less than €100 a week. It is absolutely the case that the company voluntarily set up this scheme. It was not voluntary for the employees, however.

Some of the decisions taken by employers have had a substantial impact on the performance of schemes. We could debate whether longer life expectancy is a contributing factor. The move towards outsourced work and away from direct employment was definitely a huge factor in these pension schemes. It meant that there were fewer current workers while there was a growing pensioner body. Direct employees used to do work that was subsequently outsourced to private companies that did not have pension benefits. There are now a smaller number of people feeding into a system that has an older population. Strain factors such as early retirement schemes and voluntary severance schemes have not been adequately factored in. This has led to an uncoordinated benefit and an extra cost on the scheme. People who are pensioners now, including those on deferred pensions, will be affected by the decisions that were taken and the agreements that were entered into.

The point is that employers are trying to wind up these schemes now. We are trying to ensure that employers who try to exploit the present situation by seeking to get out of their commitments will face penalties. It could be argued that the provisions we are proposing will encourage employers to keep these schemes open. We are seeking to ensure that those who walk away from their schemes even though they have the financial ability to keep them going will be penalised anyway. We do not want the pensioners and the State to have to pick up the tab in such circumstances. I remind the committee that the courts have established that the trustees of pension schemes are a contingent creditor in this scenario. That means there is a legal liability. The Pensions Board has adjudicated to that effect.

I would like to ask the Minister about cross-border schemes that involve multiple companies. In some ways, it is the opposite of the Waterford Glass situation. For example, over 1,000 UK workers are members of the IASS scheme. These British workers would expect legislative protection vis-à-vistheir peers in Britain. Where do they stand, in terms of the situation here, in a European context?