Brian Cowen (Laois-Offaly, Fianna Fail)

The pensions policy in the non-commercial bodies is that recommended by the pensions commission and accepted by the Government, that is, the defined benefit model is generally used. However, there may be circumstances where, if staff are engaged on private sector pay terms and conditions, a defined contribution arrangement is appropriate.

In regard to commercial State bodies, pension schemes are generally funded and, to date, the great majority of commercial State bodies have opted for defined benefit schemes. The schemes are a matter in the first instance for the boards concerned and the relevant legislation usually provides that they are subject to the agreement of the responsible Minister and the concurrence of the Minister for Finance.

In putting forward particular schemes, the boards of commercial State bodies must take account of a wide variety of issues and must ensure that the pension arrangements safeguard the long-term viability of the scheme and are consistent with the financial position of the body concerned. Thus, it is for the bodies themselves in the first instance to determine the nature of their pension scheme in terms of whether it be a defined benefit or a defined contribution scheme. Thereafter, the relevant Department and then the Department of Finance will consider each scheme on its merits.

As regards the accounting standards applied in pensions funding, this is primarily a matter for the board and auditors of each body, having regard to accounting standards in place.

See this speech in context