Willie O'Dea (Limerick City, Fianna Fail) | Oireachtas source

Amendment No. 18 is interesting in that it highlights the fact that the more people lose their pensions under defined benefit pension schemes, the more it will cost the State. With respect, there is an even larger problem. I have said before that the country’s demography with an increased dependency ratio of 2:1 by the middle of the century means the State will not be able to sustain the State old age pension system at the same level as it currently exists. Accordingly, it is incumbent upon us to encourage people to provide for themselves.

One of the ways that can be done is to make defined benefit pension schemes attractive again. To do that, the Government will have to restore confidence in the system which has been utterly eroded. People’s experience is that they can suddenly be informed a scheme will be wound up and get a fraction of what they were led to expect. I have met various pension scheme groups with their members in absolute despair because they had planned their retirement on a certain income level but were suddenly told, through no fault of their own, that they would only get a fraction of that. That is not fair or just.

Amendment No. 19 seeks to ensure a solvent firm that runs a defined benefit pension scheme cannot throw its hands in air claiming it is too much of a costly inconvenience, close it down and destroy people’s futures unless it is funded to at least 90% so that its members will at least get 90% of what they were expecting after paying into the scheme over many years. That is not an unreasonable demand.

If the Government refuses to accept this amendment, it is effectively stating, no matter how wealthy or well-financed a firm is and no matter what little justification there is to shut down the scheme, it is okay to do so at a whim, leaving all its unfortunate workers stranded. I would not expect a Government composed partly of the Labour Party to stand over such a situation. That is not the situation that pertains in the United Kingdom and should not be the situation that pertains here.

Amendment No. 20 simply provides that if the trustees of a pension scheme make a decision with which any or all of the pensioners are unhappy, there should be some form of an appeals mechanism. What is wrong with such a proposal? There is an appeals mechanism to the courts anyway. Why should people be put to the hassle and expense of going through that particular lottery, however? Why can there not be some independent appeals mechanism? I have dealt with workers involved with defined benefit pension schemes for many years. They see the trustees as being associated with the company, not them. There has to be some independent and inexpensive mechanism to enable them to get a second opinion as to whether they have been treated fairly or otherwise. That is not an unreasonable demand.

Again, if the Government decides to refuse this amendment, it is stating the members of a defined benefit pension scheme have no right or entitlement to expect an independent appeals mechanism on a decision by the scheme’s trustees, even if their pensions will be wiped out by the decision. That is wrong.

All Members have had representations from the IASS Deferred Pensioners Action Group, members of which have been treated in an appalling and indefensible fashion. They had no say in the decision to reduce their pensions and were outvoted by members who will be suffering a lot less and, therefore, in whose interest it was to make them take the hit. There is no appeals mechanism. The Minister signed the order from so-called expert panel. It seems to me to have been a ready-up from start to finish. A whole group of pensioners who contributed to a scheme with a legitimate expectation that they would have a certain level of income in retirement will now only have a fraction of it. That is not fair, just or defensible. Even at this late stage, will the Government reconsider its position on this particular matter?

See this speech in context