Mr. Fergal O'Brien:

Deputy Brady asked if IBEC had specific solutions to the issue. We welcome the suggested changes by the Pensions Authority to support businesses that wish to maintain defined benefit schemes.

Regarding the Chairman's comments, we are concerned that we do not see evidence of sufficient regulatory assessment of the impact of the proposed legislative changes. We would like a much more comprehensive assessment of the unintended consequences of the proposed Bill. It will accelerate a decline in defined benefit schemes. These are voluntary schemes. Why would any employer in their right mind continue to be involved in these schemes when they become mandatory and have excessive regulation associated with them? We are concerned about creating an environment that will make it entirely unsustainable for employers to continue to support defined benefit schemes.

We have made a significant point about a subset of companies and the Pensions Authority has mentioned the accounting standards issues in this context. That reinforces the need for a proper regulatory impact assessment of the proposed changes because this goes beyond the Pensions Act issues and those the authority will examine. They require much more of a whole-of-Government consideration of the proposed changes but if they result in substantial additional debt going on to the balance sheets of companies, that will not be without commercial implications and potential risk to them.

From what we have heard, we do not think the issue has been sufficiently looked at right across Government. That would concern us. At its core, we very much concur with the view that we do not see the evidence of a proper impact assessment here of the implications of the proposed changes.

We may have covered some of the points mentioned by Deputy Joan Collins. The matter is multifaceted and a range of factors are in play as to why we have seen such a demise in defined benefit schemes. It is the reality of the State, as an employer, and it has accepted that it is not affordable to maintain final salary defined benefit schemes. It is the reality of what has happened. We have seen that in other public sector employment cases internationally as well. To force a subset of private sector employers to continue with final salary defined benefit schemes would be absolutely unfair.

The Chairman asked about supporting companies that want to continue to fund defined benefit schemes and the matter of those who cannot pay versus those who will not pay. We continue to urge that regulation and funding standards be made as sensible and as appropriate as possible for the realities of the market we now have, particularly with regard to the measuring liabilities. It is the best way to try to maintain sustainability of the defined benefit schemes we have. We are happy to engage on further legislative suggestions around company obligations but we want them to be properly assessed in advance in terms of a potential impact. We are not bringing further solutions to the committee today.