Dinny McGinley (Donegal South West, Fine Gael) | Oireachtas source

I am aware of the difficulties that many pension schemes currently face. In regard to the IAS scheme in particular, while I am aware that extensive efforts are being made by all parties, including the expert panel, to resolve the extremely complicated issues arising, it would not be appropriate for me to comment on an individual scheme. It is important to note that the Social Welfare and Pensions (No. 2) Act 2013 ensures that pensioners maintain a significantly higher priority in pension scheme funds. However, it also fair and equitable in cases where the scheme is under funded and all members have made substantial contributions that some measure of protection is afforded to all members of the scheme. The concept of intergenerational risk sharing is not consistent with the previous situation, whereby people of working age could potentially lose their entire benefits in the event of a scheme being wound up before pensioners lose any benefits whatsoever.

Existing provisions in section 50 of the Pensions Act 1990 gives the Pensions Authority the power to issue a directive to a pension scheme to restructure certain benefits. The measures set out in this Bill will ensure that trustees shall notify members of the details of such a direction and their right to appeal. Section 24 of the Bill provides that trustees are required to notify the members of the direction and the measures the Pensions Authority may specify to be taken in such a restructuring, or if no measures are specified, such measures that the trustees consider may be necessary to reduce the benefits in the scheme. If the Minister was to accept amendment No. 24, it would mean that the members of the scheme would not be notified of the details of the measures considered necessary to bring the scheme to a sustainable funding position.

This section of the Bill also provides that trustees notify members of the right of appeal to the High Court against a direction by the Pensions Authority to restructure scheme benefits. The majority of directions issued by the Pensions Authority to date were on the basis of an application from the trustees of the scheme to restructure scheme benefits. Such applications to the Pensions Authority can only be made after the trustees have completed a comprehensive review of the scheme and after consultation with employers and scheme members. The Pensions Authority can also issue a unilateral section 50 notice in circumstances where the trustees of a scheme are not complying with scheme funding requirements as set out in the 1990 Act.

As the Deputy will be aware, the function of the Labour Court is to investigate industrial disputes. Having regard to the circumstances and the process underpinning the issue of a section 50 notice by the Pensions Authority, it is considered that the High Court is the appropriate court to hear such an appeal.

In regard to amendment No. 26, section 3 of the 1990 Act already makes it an offence for a trustee to fail to notify members where the Pensions Authority makes a direction for a scheme to restructure scheme benefits. Therefore, these amendments are not required.

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