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

I thank the witnesses for coming in and making a presentation which we appreciate. Dr. Bambrick rightly said the Government's proposals have yet to be legislated for. Having studied an outline of those proposals, I understand they do not add much to the existing protections. There is much talk about extra consultation but no compulsion. We are proposing something stronger involving compulsion. The unpaid amount of the deficit will be a debt on the company etc.

While in the case of a wind-up where there is a statutory provision for distribution of assets, my original intention in drafting section 1 was to provide for cases where there is a reorganisation and benefits are reduced across the board. At the moment in cases of a reorganisation there is a certain amount of discretion. I have received representations saying that pensioners have no say in that even though they are often one of the parties adversely affected. I want to ensure that provided a majority of the overall membership is in favour of looking at what is proposed by the trustees by way of reduction of benefits in the case of a reorganisation, there would be some appeal mechanism which includes pensioners. I may not have taken the most elegant route to reach that conclusion, but we can redraft it.

The Department analysis suggests that something along the lines of what we are proposing would be a disadvantage to younger members because in the case of a scheme which is eventually closed down, if the closure is delayed the present beneficiaries can continue to receive their benefits thereby increasing the overall deficit and this would adversely affect younger members.

We also need to guard against driving companies into insolvency. I have tried to do that to the best of my limited ability by allowing for a lesser payment but not less than 50% or having it payable over a five-year period with ultimately an appeal to the High Court. Perhaps we could be more flexible there. Solvency can range from cases where the assets barely exceed the liabilities to very wealthy companies. A pension deficit can be anything from €50,000 to €1 billion or €2 billion. We need to get that balance right.

It has also been mentioned that a proposal such as this would put companies at a competitive disadvantage. They seem to be the main issues raised. I would appreciate ICTU's comments on those.