Mr. Colm Ó Gógáin:

I am a pensioner representing the Bord na Móna retirement association. In the general scheme of the Social Welfare and Pensions Bill 2017, published on 9 May 2017, head 12 related to minimum notice for ceasing contributions and head 13 related to determination of schedule of contributions. This provided for some but not sufficient protection for pensioners from employer sponsors of defined benefit pension schemes who intend to cease contributions to the schemes. Head 12, under provision No. 5, referred to funding proposals.

It proposes that the sponsoring employer continues to pay the contributory rate as per the terms of the funding proposal during the 12 month period.

Under head 13 (2), it also states that the amount determined by the board in subsection (1) shall be deemed to be a debt due from the employer concerned to the trustees of the scheme and may be so recovered by the trustees in any court of competent jurisdiction.

The Social Welfare, Pensions and Civil Registration Bill 2017, as published on 6 July 2017 had none of the above. In fact, heads 12 and 13 were excluded. Instead it had only two amendments to Part 3 of the Pensions Act 1990 concerning timing.

I wish to bring to the committee's attention some facts in relation to the semi-State companies defined benefit pension schemes. Firstly, pension scheme membership was compulsory and a condition of employment. In looking at my own documentation, my job offer letter from Bord na Móna on 19 August 1974, states that the board had in operation a general employees superannuation and widows and orphans pension scheme, membership of which is compulsory. I want to put that on the record.

The next item is that the scheme trustees are appointed by the company board which also has the right to approve trustees nominated by members, and in some cases members have a right to nominate trustees. Furthermore, company board approvals are required for trustee decisions, for example, pension increases, as mentioned by Ms de Buitléir, appointment of investment managers and investment strategies. Finally, the shareholder through its company board has significant influence and control on defined benefit schemes and this must be aligned with its responsibility and accountability to those schemes.

Under clause (5) and the provisions of head 12 in the draft head, as published in May 2017, and the reference to funding proposals, the draft Bill proposes that the company-sponsoring employer "continue paying the contribution rate as per the terms of the funding proposal during the 12 month period". This, in line with company responsibility and accountability to the scheme, which I referred to earlier, must also reflect the requirement to make good the sponsoring employer’s remaining balance of the funding proposal and that this becomes a debt on the sponsoring employer. The ranking order of this debt should be reflective of when the debt was incurred, that is, the date of the agreement on the funding proposal.

The rationale for this is that in all schemes, and especially in schemes where both sponsoring employer and scheme members both contribute to fund deficit resolution via a funding proposal, the scheme member share is fully committed and provided for as scheme liability is immediately reduced via the implementation of pension payment reductions whereas the sponsoring employer's contribution is made on a phased basis of up to ten years, as may be set out in the terms of the funding proposal.

In summary, the sponsoring employer sets out the rules and controls of a defined benefit scheme via the trust deed. It has total control of that. We ask the committee to ensure that this power is aligned with the sponsoring employer’s responsibility and accountability to the scheme. A 12 month notice period of cessation of funding proposal contributions is not reflective of that responsibility nor accountability. Go raibh maith agat.