Joan Burton (Dublin West, Labour) | Oireachtas source

I repeat for the benefit of the House that the arrangements in the legislation are designed to get the maximum number pension funds, which for a variety of reasons have come into very serious deficit, over the line.

Earlier I addressed the matters which Deputy Ryan and Clare Daly raised in relation to what happened to this particular pension fund. I listened carefully to everything Deputy Clare Daly stated and a number of points she made about what may or may not have happened to this fund and how it may or may not have been managed. I repeat it is important to bear in mind that the provisions in section 50 of the Act do not differentiate between active and deferred scheme members as these members are participating in a scheme during the phase where members accumulate pension rights. However, the extent to which pension and payment can be restructured is limited. In the Act debated last year, the first €12,000 of pension is protected. As most of those in these schemes and in this one as well who have long service would also have a State contributory pension, as the Deputy was suggesting, we are trying to protect those fully on a combined basis of €24,000. Given the level of entitlement that the lower paid may have to pensions, that is a significant and strong feature of the legislation which I introduced.

Between €12,000 and €60,000, it can be reduced by up to 10%. Up to €60,000 a year, and €60,000 is a significant pension, the reduction above the €12,000 is 10%. For those in excess of that, those over €60,000 a year, which would be quite a significant pension, the reduction increases to 20%. In addition, in many pension funds, because of the nature of the employments, persons would have been in insurable employment and there may be a full entitlement to a contributory pension. Essentially, these changes provide for the sharing of the risk of scheme underfunding across all of the scheme members. The issue of how these changes might be applied is a matter for the scheme trustees who, I stress, are required under trust law to act in the best interests of all scheme beneficiaries just as they are required to administer the scheme in the best interests of the beneficiaries and they are required to administer it properly in the context of trust law.

I addressed some of the comments of Deputies Ryan and Clare Daly in my earlier response. I do not propose to accept these amendments for the reasons I have set out.

The Deputies should bear in mind that what we are trying to do here - there is no disagreement between either side of the House - is to protect as far as possible persons of different categories in defined benefit schemes which, unfortunately, are in difficulty because of what has happened to schemes. The schemes are made up of two parts: the employer and the employees. Obviously, the employees could be persons currently on pension, current workers or persons who once worked in the company but subsequently left. What employees have done subsequent to leaving the company is a matter for them. Whether they were in other employments or other businesses subsequently is beside the point in relation to the trust rules and what the trustees are obliged to do and how they are to operate in the best interests of all the members.

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