Thomas Pringle (Donegal South West, Independent) | Oireachtas source

Permanent TSB had a defined benefit pension scheme which closed to new members in 2006. At the time when Permanent TSB was taken over by Irish Life in 2001, the pension scheme was 120% funded but over the intervening years, the company did not make the full contributions that would have been required to keep the pension scheme in balance. There is now a deficit of somewhere in the region of €115 million.

The reason we put this topical issue forward today is because on foot of the Mercer report, the Minister for Finance asked the covered institutions to come back to him with plans for how they were going to reduce their payroll by a minimum of 6%. I understand that Permanent TSB has submitted a plan to the Department of Finance, the main plank of which is that it intends to end the defined benefit scheme within the company. This is projected to save between 8% and 10% of the cost. This may satisfy the Mercer report but will affect 1,200 current and former workers who have taken early retirement and have deferred pensions until they reach retirement age.

This will not affect the existing pensioners because they are protected under existing law but these 750 deferred workers and 450 active members of the pension scheme will see their pensions reduced by between 53% and 68% of what is projected if this scheme is closed in such a fashion. That the company should even consider doing this to the pension scheme is very unfair when it was the company that ran it down by not making the proper contributions over the past number of years and allowing the scheme to run up a deficit.

It is in the Minister's power not to accept this plan from the company, send it back to find the reductions from somewhere else and protect these workers who have invested in this pension scheme, made the contributions and are looking to protect their future which they see being seriously undermined.

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