Leo Varadkar (Dublin West, Fine Gael) | Oireachtas source

There are two points. First, it is important to point out that the law in the United Kingdom has been different for a very long time. When employers established those defined benefit schemes decades ago, they knew they would have a liability in terms of making up any deficit. We know, unfortunately, that even though the law in the United Kingdom is different, employers there have found any number of ways to get out of that obligation. This was seen in a number of scandals in the United Kingdom where companies used mechanisms to avoid their obligations. Even though the law is very different, it is not necessarily successful. In this State, we must consider what the impact would be if we were to change the rules, effectively retrospectively, and impose a liability on employers for past liabilities accrued. Consider a situation where, for example, a company is solvent but where the pension fund associated with it is not. One could turn the company insolvent and the consequences would be that the employees would lose their jobs, receive only the statutory redundancy and, potentially, lose their pensions also. Consider the consequences for a company that plans on expanding. Having that liability added to its balance sheet would mean it could not expand any more. Consider the difference between two companies, let us say, for example, two airlines. Perhaps I should not use airlines as an example because I do not mean what people may think I mean. Consider one factory next door to another. One is a good employer that traditionally has a defined benefit pension scheme and the other does not and never did. If one imposes an employer liability on the factory that had the defined benefit scheme, it would be placed at an enormous disadvantage against the factory next door that never provided anything for its employees' pensions. Thus, the good employer would be punished and the bad employer rewarded. All those issues must be considered.

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