Willie Penrose (Longford-Westmeath, Labour) | Oireachtas source

Solvent employers can legally walk away from their liability to fund defined benefit pension schemes, as required under the employment contracts with current or former employees, simply by deciding to wind up the scheme. It is possible because most defined benefit scheme trustees and rules allow an employer to wind up a pension scheme and cease contributions while ignoring any deficit in funding of the scheme and its inability to pay the benefits promised. It is most unsatisfactory that an employer's liability to fund the deficit of a scheme on wind-up is determined solely by the trustees rather than by legislation. Ireland is one of the few countries that does not underpin this right with legislation. My pensions amendment Bill will deal with this. I put it to the Minister that accountancy standards require employers to recognise the liabilities of pension schemes either on their financial statements or balance sheets.

Removing those liabilities from the balance sheet has a major transformative effect for the employer, as we saw in a recent case. That malaise is spreading across the country, which Deputy O'Dea knows from events in his constituency. These companies are running amok because there is an incentive to walk away from a defined benefit pension scheme. My Bill includes a provision to end that incentive and allow for the crystallisation of the debt there and then, which would enable the trustees to sue the company for the debt. Does the Minister agree this is a simple way to deal with the matter once and for all? Deputy O'Dea is right that we are no different from the UK or anybody else. The companies that are running away from these schemes are profitable. They are skidallying out the door and leaving their unfortunate workers behind. If we do not do something for those workers, we will have even more problems.

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