Alice-Mary Higgins (Independent) | Oireachtas source

Picking up on the last point, there can be a touch of disingenuity in trying to effectively pitch the participants in the scheme against each other. I have been a young contributor to schemes and have left organisations before benefiting from them. It is very important that younger employees can have a level of trust in their pension scheme and trust in their employers. If they see their older colleagues being treated poorly or having their schemes withdrawn, it will make many younger employees question the trust in the relationship they have. There is an element of trust in pension schemes, including defined benefit schemes, especially trust in the idea of employees of one company engaging collectively with the scheme, which is probably equally important.

We have referred to the danger of people closing schemes because legislation is coming. I tabled amendments to the Social Welfare Bill 2016 on Report Stage in the Seanad. Of course, if they had been agreed, it could have been law within ten days. I know this committee expedited looking at this issue back in 2017 when we did a legal review of that area in the hope that change could have been introduced in the summer of 2017. It is unfortunate that we have lost two years on the matter.

The Bill makes reference to a number of time periods. I know that Deputy O'Dea is considering a five-year time period. I like the way the Bill does not simply take a snapshot of a company's finances.

Instead of simply looking at a snapshot of the company right now, it considers whether the company has the capacity to restore itself in the next five years. That avoids the danger of an outlier moment of artificial depression in company finances perhaps being used to justify the infeasibility of a scheme as a longer period is under examination. Dr. Bambrick might comment on how that could be used effectively. There may be scope in terms of members making an appeal. That also might need a time period because we want to ensure it is not just a technical opportunity for members to lodge an appeal over a bank holiday weekend or something. Unfortunately, we have seen circumstances where very short notice periods were applied but we would like to ensure there is a reasonable period of notice in this regard.

Will Dr. Bambrick refer to the auto-enrolment schemes? Is there potential in the Bill or in complementary legislation to deal with situations where companies may wish to move from a defined benefit, DB, scheme to an auto-enrolment scheme? I mean where companies are bringing in auto-enrolment schemes for their new, current or young employees but have a defined benefit scheme for others. Will Dr. Bambrick outline what she thinks good legislative practice might look like regarding that transition? Let me give an example. If I have been working for five or ten years and only have a certain number of defined benefit contributions that I have made and the scheme is winding up, do I carry that benefit or how does it work? Does Dr. Bambrick have an outline of what good practice might look like? Will the DB pension systems run parallel within companies or is there scope for the winding up of one scheme to segue into the other in a situation of transition that did not involve insolvency?

A roadmap for pensions has been mentioned a number of times. Without wanting to stray too far, with due respect to the Chair, what we are discussing concerns people who, in good faith have paid into a scheme over their lifetime and expected and planned for a certain level of security in their retirement. Similarly, in relation to the roadmap for pensions, there are issues at present around the contributory pension which again, people have planned for contributed to and paid in to. While the transition from 20 years to 30 years' contributions to qualify for the State pension had been signalled for ten years, I refer to the discussion that has taken place around the move to 40 years' contributions in order to qualify for the full State pension. Might Dr. Bambrick see any parallels for those who have planned and contributed over their working life, only to suddenly find the goalposts moving in that regard?