John Brady (Wicklow, Sinn Fein) | Oireachtas source

The concerns around defined benefit pension plans are nothing new. Fianna Fáil could have done this a long time ago when it had a majority Government and the power to do so.

Back in 2012, the OECD clearly identified the allowing of healthy sponsors to walk away from defined benefit pension plans and shutting them down as a weakness in Irish legislation. After all these years, a Sinn Féin Bill introduced last week spurred others to introduce a Bill on this matter only two days later, although late in the day. Last week, Sinn Féin introduced a Bill to directly address the issue of healthy companies making a conscious decision to wind down defined benefit schemes and walk away from their pension obligations. Our Bill would ensure no company with positive net revenues, or which has a parent company with positive net revenues, would be allowed to close a defined benefit scheme unless this scheme has reached a minimum 90% funding standard. This would have prevented what happened last November in Independent News & Media, INM. This would have sent a clear message to profitable companies that they will not be allowed to simply decide to renege on and walk away from their obligations to their employees.

The Government could have supported and introduced our Bill without, in the words of the Minister for Social Protection, Deputy Leo Varadkar, “threatening a company’s financial stability” or “rendering some employers insolvent”. We are only talking about companies which have positive net revenues. Only last month, the Minister made it clear he had no plans to bring forward legislation regarding defined benefit schemes but that issues in respect of these schemes are continually scrutinised by his Department, especially given the current environment. If this is true, what conclusion did his Department’s scrutiny come to on the back of the pension debacle at INM last November? That company announced its intention to shut down its defined benefit pension scheme, inflicting cumulative benefit cuts of up to 70% on some of its current and former employees. What was the Minister’s response? He stated, “My Department scrutinises issues around defined benefit schemes”. It simply does nothing. That is not good enough for workers in this State. The Government’s inaction sends a message to companies right across this State that they are free to consciously wind down defined benefit schemes and walk away from their pension obligations.

Certain companies have taken, and will take, advantage of this weakness in legislation which allows them to walk away. In recent days, I have been contacted by several employees from a profitable and well-known company which has announced to its employees its intention to move from a defined benefit to a defined contribution pension scheme. This will remove the defined benefit pension scheme and replace it. Despite all these issues, the Government chooses to sit on its hands.

This Fianna Fáil Bill is not without its faults. If we were to see a similar situation to Clerys in 2012, would this Bill protect that pension scheme? In that case, 460 employees of Clerys were left without their pensions. For the 500 active defined benefit schemes remaining and for the 120,000 members within them, steps must be taken. We have a responsibility, as legislators, to take action for the protection of pension schemes and for the protection of workers. For that reason, Sinn Féin will support this Bill. However, we will be looking at ways to improve it to ensure maximum protection for workers.

The Irish Congress of Trade Unions, ICTU, sent a call to all Opposition parties to work together on this matter. I am willing to sit down with Deputies Willie O’Dea and Willie Penrose and others to ensure heads of a Bill are prepared to strengthen this area to guarantee the pensions of all workers are protected across the State.

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