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

I move amendment No. 15:

In page 16, after line 35, to insert the following:“26. The Pensions Act 1990 is amended by inserting a new section 48A as follows:

“48A.A solvent firm shall not be allowed to close a defined benefit pension scheme except where the scheme has reached a minimum 90 per cent funding standard.’’.”.

We had a discussion on this issue Committee Stage when the Minister of State, Deputy Kevin Humphreys, not deliberately but certainly misinterpreted my intentions in this regard. In the United Kingdom the law states a solvent firm, a firm that can well afford it, cannot just walk away from its obligations under a defined benefit pensions scheme and close it down, unless it has funded it to the extent of 90%. I am proposing we have a similar rule here. My intention is not to put onerous responsibilities on firms to the extent that it will cause them to sack people. We are trying to create jobs, not lose them. There are firms, however, which could well afford to meet the standards set in the amendment without any great financial damage to themselves. We owe it to the workers who have been contributing for years in the legitimate expectation that they will have a certain rate of return to put it in place.

On amendment No. 16, I accept the position of deferred pensioners is being dealt with. However, if the trustees of a defined benefit pensions scheme decide, for whatever reason, be it financial pressure or that the scheme is in difficulty, to reduce the benefits paid to the different classes of people entitled to pensions under the scheme, effectively these pensioners will have no independent appeals mechanism. When I raised this issue on Committee Stage, the Minister of State told me they could go to the courts. We accept that, but going to the courts is not always a feasible option and can be expensive. I remind the House that the cost of going to court will not be reduced by the legal services Bill which has finally been agreed to by the Government. That Bill is a total cop-out, but that is a matter for another day.

Pensioners, of whatever category, who believe they have been harshly or unfairly dealt with by a decision taken by a pensions scheme’s trustees should have the right to have an independent arbitrator look at the case they want to make. It might not make any difference as the arbitrator might decide that the trustees were correct. However, they should have that right and not be forced to go to court.

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