Róisín Shortall (Dublin North West, Independent) | Oireachtas source

I thank Deputy Thomas P. Broughan for allowing me to share time.

I want to confine my comments to what was originally section 33 of this legislation in regard to the pension provision of the IASS. I make the point that it is very unsatisfactory to deal with such a significant issue in the context of a Bill which is designed to address something entirely different in regard to developments in the Shannon area. While I am not going to comment on that, in general terms, those proposals are to be welcomed.

It was wrong to include such a provision in this legislation - originally in section 33 and now in section 34 - because it means that it has not received adequate attention or consideration. When the Bill first appeared, the explanatory memorandum stated that section 33 provided for amendments to the existing superannuation provisions governing the State airport authorities and also facilitated changes to the Irish Airlines (General Employees) Superannuation Scheme, IASS. It does not give any idea regarding the provisions of that section. I think this is misleading and indicates that it was a mistake to include it in this legislation. Equally, the Bill digest produced by the Oireachtas Library and Research Service includes virtually nothing on these provisions. When I queried that, the view was taken that there is nothing new in this but this is not the case.

This legislation has very significant implications for a very large number of people, particularly those living on the north side of Dublin, many of whom live in the Minister's constituency. Those most affected are the 5,000 or so deferred pensioners from the IASS. These people have been particularly badly treated over the years. They were very much encouraged and in many cases pushed to leave what were very secure jobs they held for many years in the national airline and Aer Rianta. The Government of the day regarded them as surplus to requirements. In order to slim down Aer Rianta and the national airline, they were enticed and in many cases pushed to leave. Life became very difficult for many of those people and the squeeze was put on them to leave the companies in a number of attempts to reduce the workforce.

When they agreed to accept offers made to them, those offers were very serious offers that were in writing. All of the people received one of these letters of offer which set out their entitlements. There is a very strong case for the view that these letters of offer constitute a very clear legal contract between the individuals and the company. Details and guarantees were given that when these people reached the retirement age of 65 years, they would have a very specific and clearly defined pension entitlement. It now seems that a very definite attempt is being made to withdraw the guarantees that were given and to renege on the agreements that had been reached in good faith with the people concerned from the two State companies.

We know that deferred pensioners are in a very difficult situation in so far as they are not entitled to any kind of serious representation or consultation. This is a major problem. They have been overlooked to a large extent by the representative bodies. Of course, we know that deferred members are not allowed to have union representation and are not represented by the Pensions Ombudsman or the Pensions Board. The Ministers for Transport, Tourism and Sport and Social Protection are leaving it all at arm's length and saying that it has nothing to do them and that these are semi-State companies. If that view is taken and followed through on, it would be fine but it does have something to do with the Minister for Transport, Tourism and Sport when he is prepared to introduce legislation to seriously curtail the entitlements people understood they had. He is entering into it and playing a part in the very basic legislation that underpins what deferred members believed was a right they had.

This legislation seeks to remove members from the scheme and over-ride what everybody understood were the existing rules. An attempt is being made to do that without a single safeguard for the members of the IASS. I think this is extraordinary. It seems to be unprecedented in law and is impossible to defend. It gives very wide-ranging powers to employers to transfer members to a new scheme without any consultation. In particular, it gives very wide-ranging powers to the trustees to unilaterally make amendments to provide for the cessation of benefits and contributions by all members and their employers. We know that under the law as it stood that this was not possible. It seems that under the provisions of this legislation, the employers on one occasion only can direct that any one or more of the current or former employees must transfer to a replacement scheme. The amount to be transferred will be determined by the trustee on the advice of the actuary. All of the powers are with the trustees and employers and scant regard has been paid to the entitlements or rights of the deferred members.

This legislation effectively allows two solvent companies to wind up a defined benefit scheme without fulfilling the minimum funding standard as required by the Pensions Act. Allowing Aer Lingus and the Dublin Airport Authority to transfer members into a new scheme without preserving their defined benefit for past service effectively replicates a wind up. I know the Minister has said in the Seanad that it is not a wind-up because if it was the equivalent of a wind-up, there would be nothing left. However, it is in effect the same as a wind up even though there is funding there. What it means is that the benefits and entitlements which all the members understood they had are now being extinguished. In effect, the Minister proposing to give the powers that would be allowed in a wind-up.

It is very hard to understand why he decided to take this course of action. We were waiting for the report and deliberations of the expert panel. It has been a provocative move to include in this legislation relating to Shannon a provision that has such far-reaching implications for so many people in terms of their income in the future. It is an unacceptable approach to tackling a difficult issue. The fault lies with the actions of a number of the Minister's predecessors. Nonetheless, two State companies entered into legal agreements with their deferred pensioners. These agreements by law should stand. They do stand in the absence of the legislation proposed by the Minister to extinguish these rights. This is not an acceptable way to treat people and it is not acceptable for the Minister to say that these are commercial semi-State companies and that it has nothing to do with him. It does involve him. He has facilitated the ill-treatment of people through sponsoring this legislation. If nothing else, as a 25% shareholder in Aer Lingus, he also has a clear responsibility to ensure that the company of which he is a part and the Dublin Airport Authority treat people properly and with dignity and respect legal agreements that were reached in the past, however inconvenient they may be to him at this point.

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