Joan Burton (Dublin West, Labour) | Oireachtas source

The explanatory memorandum refers to the anticipation of continuing development of International Financial Reporting Standards, IFRS, and generally accepted accounting principles, Irish GAAP. This is probably the most difficult and certainly one of the most contentious issues in the field of accounting nationally and internationally because what has happened is that the accounting treatments have meant that many companies approach development and possible consolidation and other issues by seeking to limit liabilities in respect of pensions and do away with them altogether. The consequence is that not just in Ireland but in many other countries workers end up losing their pensions. I accept there is to be a review, however, I think it is very important particularly in the context of European standards that the provisioning and the accounting treatments of pensions should be looked at. Clearly from the narrow view of a company, it may be simply about the company getting rid of the pension fund liabilities and it may become much more profitable, but there are social and economic consequences to a society where people do not have pensions. The supplementary pension system, which I was involved in designing, was to try to overcome what has happened as a consequence of some of the accounting standard developments which have decimated pension provision in private companies.