Éamon Ó Cuív (Galway West, Fianna Fail)

Under the Pensions Act, defined benefit pension schemes must meet a minimum funding standard which requires that schemes maintain sufficient assets to enable them discharge their accrued liabilities in the event of the scheme winding up. Where schemes do not satisfy the funding standard, the sponsors or trustees must submit a funding proposal to the Pensions Board to restore full funding within three years, although as part of temporary measures announced by the Government, the Pensions Board can now allow a scheme ten years or more to meet the standard in certain circumstances.

At the end of 2009, there were 254,325 members in 1,192 defined benefit schemes subject to the funding standard. It is estimated that approximately 75% of these schemes are in deficit. However, the extent of the level of under-funding will not be fully apparent until all schemes carry out their next actuarial assessment and report the results to the Pensions Board.

The Government is conscious of the pressures on both sponsoring employers and pension scheme trustees, arising from the very significant losses incurred by pension funds during 2007 and 2008. While schemes recovered some of their losses in the last year, we are anxious to ensure, in so far as we can, that those involved have sufficient time and space to fully assess the implications for their schemes and the remedial action they can take. This was the thinking behind the implementation of a number of measures, in December 2008, to ease the pressures being felt by many pension funds. Those measures included the granting of extra time for schemes to formulate funding proposals and allowing longer periods for recovery plans. Just this week, the Pensions Regulator announced an extension of the deadline for submission of funding proposals for those due to submit before 30 June next by five months, to 30 November 2010. This extension will allow schemes to take into account the recently implemented Occupational Pension Schemes (Preservation of Benefits) (Amendment) Regulations 2010. These regulations permit schemes to increase the pension scheme's normal retirement age by way of an application under section 50 of the Pensions Act with immediate and retroactive effect. The extension will also allow scheme trustees and employers to consider the effect of the proposed changes in the national pensions framework.

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