Brian Lenihan Jnr (Dublin West, Fianna Fail)

Discussions are in train with the trustees and administrators of the funded pension schemes of the five older universities and certain non-commercial semi-State bodies, SSBs, which have funded pension schemes with a view to providing consistency and clarity for the future in terms of meeting the liabilities of the schemes. This follows consideration some time ago of the pension difficulties facing those universities by a working group under the Higher Education Authority, which recommended such discussions. The background is that all funded schemes must now meet minimum funding standards under EU law unless they are covered by the State. This has presented problems for the universities and non-commercial SSBs with funded pension schemes where the State ultimately carries the liability but where this is not clear enough to warrant exemption under EU law. In that context, and provided all the schemes concerned agree, it is proposed that the assets of those schemes would be transferred to the State with the liabilities, which would then be effectively met effectively by the State on a pay-as-you-go basis in the future. The terms and conditions of the schemes would be neither better nor worse than what the members would be entitled to anyway. If agreement is reached, legislation to give effect to the proposal would be required.

I am informed that the estimated value of the assets of the funds in question at the end of 2007 was in the region of €2.3 billion but this will have changed in the interim and is subject to market fluctuations. As regards the impact on the public finances, under current EUROSTAT rules the transfer of the assets would impact positively on the general Government balance, GGB, when received. This initial revenue would be offset in the future by the payment of pension benefits which would be recorded as Government expenditure at the time of payment. The effect on the GGB when the assets are received is clearly identified as being once off in the national accounts and the underlying GGB is, therefore, still unaffected.

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