Clare Daly (Dublin North, United Left) | Oireachtas source

I move amendment No. 24:

In page 23, to delete lines 29 to 32.

The Minister of State is lucky because I am trying to get back to a committee. I will be brief as we have discussed this matter previously. This section of the legislation relates to the pension elements and circumstances whereby we are dealing with the unilateral restructuring of pension schemes as directed by the Pensions Authority. In that sense, Deputy Lawlor's amendment is somewhat obscure because it does not really matter who the trustees are. Ultimately, the Pensions Authority can dictate anything over the trustees' heads. Even if deferred members had the right to elect their own trustees, those trustees can be superseded by decisions of the Pensions Authority. My fear is that this section gives the authority even greater powers in that regard.

We are dealing with scenarios where pensioners' benefits will be cut. It is not a positive scenario where they will be getting extra benefits, so it is very difficult. We have to see it against the backdrop of difficulties that have emerged in defined benefit pension schemes. So far, the State's response to them has been wholly inadequate and out of kilter with developments in Britain where the authorities have adopted a more responsible attitude.

Consider some of the big defined benefit schemes which are currently in the news, such as the Irish aviation superannuation, IAS, scheme. That scheme has 15,000 members, some of whom are facing massive reductions in their benefits. When they signed up to their contracts, their terms of employment required them to be members of the scheme. They are now faced with the double insult that their colleagues who worked with them in Britain are going to get their full pension entitlements thanks to the legislation put in place in that country. It is important to set the scene in that regard.

The measures that the Minister is introducing should be viewed in the context of other legislation which is currently before the courts. A High Court ruling in 2012 found that the pension deficit in the IAS scheme was a contingent liability for the companies concerned, which led the workers and members of the scheme to believe that the trustees would be able to take legal action to force the companies to honour their pension liabilities as defined by the High Court. I fear this section, which gives the Pensions Authority an overriding power over the trustees, will tie their hands in that regard and is potentially in conflict with legislation that is before the courts. In Britain, a number of relatively recent landmark cases involving defined benefits, including a case involving IBM, resulted in rulings that workers have a reasonable expectation to a certain commitment on their retirement based on the contracts they signed.

The guidance notes prepared on foot of the passage of the Social Welfare and Pensions (No. 2) Bill 2013, which we discussed prior to Christmas, were tilted in favour of the employers and did not take adequate account of the rights of members. The fact that no employer covenant accompanies this section of the legislation weakens it considerably in that regard. I do not think it is necessary because it gives too much power to the Pensions Authority to do what it likes over the heads of the trustees. For that reason, I am proposing the deletion of the relevant clause.

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