Joan Burton (Dublin West, Labour) | Oireachtas source

I am sure the Deputy is familiar with the history of defined benefit pension schemes. The employer is the sponsor of the scheme and makes promises regarding the contributions the employer and the contributions of employees, if any, to the scheme, thus determining the level of benefit that will accrue on the retirement of the employee. The reason so many schemes have difficulty is that the context of the promise, made many decades ago in some cases, failed to take into account the happy increase in life expectancy. In the past, one might have lived after retirement for ten to 20 years but this could now be 30 or 40 years, resulting in a fundamental change in schemes' total exposure to liability. It is important to remember that the trustees, prior to making an application to the Pensions Board, will have to have undertaken a comprehensive review of the scheme with a view to its long-term stability and sustainability. The review must cover a number of matters, including the benefits payable under the scheme, the options available for reductions in benefits and the impacts on the various categories of members and others. As the Deputy knows, there are retired members, active members who are currently paying into a scheme, deferred members and people who have already retired but who have not yet reached pension age.

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