Willie O'Dea (Limerick City, Fianna Fail) | Oireachtas source

I move amendment No. 39:

In page 9, after line 22, to insert the following:

“11. The Pensions Act 1990 is amended by inserting a new section 48A as follows:

“48A. A solvent firm shall not be allowed to close a defined benefit pension scheme except where the scheme has reached a minimum 90 per cent funding standard.”.”.

We have had previous discussions about this topic, or at least we have had them with the senior Minister. At the moment, in the case of a defined benefit pension scheme in operation in this country, the position is that the employer, regardless of how solvent, well-off or wealthy it is, can close down the scheme. The employer is entitled, without any restriction whatsoever, to close it down to the detriment of the people who have been paying into it genuinely, sometimes for many years, with a legitimate expectation of a certain level of pension entitlement.

As I understand it, the position in the nearest jurisdiction, the United Kingdom, is that an employer is not legally entitled to close down such a scheme unless it brings it up to a 90% funding level. The employer cannot close it down unless it is 90% funded so long as the employer is solvent.

Amendment No. 40 relates to the scenario whereby, because a scheme is in difficulty, the trustees make a decision to restrict entitlement under the scheme. Again, it has been strongly represented to me that in many cases there are one or two categories of people who are sometimes unhappy with the decision taken by the trustees and they have no input. In particular, I have deferred pensioners in mind. They seem to have no input. They have to take what they get.

I am suggesting there should be an independent appeal mechanism to which any group of pensioners adversely affected by the decision of the trustees could seek redress. Everyone could have confidence in and appeal to such a mechanism on the basis that their rights are being severely restricted. If an appeal system was in place, it might well lead to a rejigging of what has been done by the trustees. I can think of cases where such changes would be applied.