Olwyn Enright (Laois-Offaly, Fine Gael)
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Question 59: To ask the Minister for Social and Family Affairs the number of defined benefit pension schemes which fail the minimum funding standard; the number of persons affected by this; and if he will make a statement on the matter. [15644/10]

Éamon Ó Cuív (Galway West, Fianna Fail)
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Under the Pensions Act, defined benefit pension schemes must meet a minimum funding standard which requires that schemes maintain sufficient assets to enable them discharge their accrued liabilities in the event of the scheme winding up. Where schemes do not satisfy the funding standard, the sponsors or trustees must submit a funding proposal to the Pensions Board to restore full funding within three years, although as part of temporary measures announced by the Government, the Pensions Board can now allow a scheme ten years or more to meet the standard in certain circumstances.

At the end of 2009, there were 254,325 members in 1,192 defined benefit schemes subject to the funding standard. It is estimated that approximately 75% of these schemes are in deficit. However, the extent of the level of under-funding will not be fully apparent until all schemes carry out their next actuarial assessment and report the results to the Pensions Board.

The Government is conscious of the pressures on both sponsoring employers and pension scheme trustees, arising from the very significant losses incurred by pension funds during 2007 and 2008. While schemes recovered some of their losses in the last year, we are anxious to ensure, in so far as we can, that those involved have sufficient time and space to fully assess the implications for their schemes and the remedial action they can take. This was the thinking behind the implementation of a number of measures, in December 2008, to ease the pressures being felt by many pension funds. Those measures included the granting of extra time for schemes to formulate funding proposals and allowing longer periods for recovery plans. Just this week, the Pensions Regulator announced an extension of the deadline for submission of funding proposals for those due to submit before 30 June next by five months, to 30 November 2010. This extension will allow schemes to take into account the recently implemented Occupational Pension Schemes (Preservation of Benefits) (Amendment) Regulations 2010. These regulations permit schemes to increase the pension scheme's normal retirement age by way of an application under section 50 of the Pensions Act with immediate and retroactive effect. The extension will also allow scheme trustees and employers to consider the effect of the proposed changes in the national pensions framework.

Olwyn Enright (Laois-Offaly, Fine Gael)
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The national pensions framework has been published and we will have the opportunity to discuss it in more detail at the Select Oireachtas Committee on Social and Family Affairs tomorrow. Does the Minister propose to try and adopt what is in the framework in a cohesive, all-encompassing way or does he propose to make changes on a budgetary basis year in and out as has been done in the previous two budgets with schemes such as PIPS? I put this question because of the lack of security workers feel they have with regard to the pensions they expect to receive but which in many cases they will not realise. The reason I asked this question is that a legal action is being brought against the State by workers in Waterford Crystal, of which I am sure the Minister is aware. They allege the State manifestly disregarded its obligations under Directive 80/987/EEC which deals with insolvency. Deputy Shortall questioned the Minister's predecessors on this in the House. The workers in Waterford Crystal quote the Robins case in the UK and argue that had we transposed the directive properly they would at least have received a far bigger percentage than they are receiving under the current arrangements. I presume the State will defend that action. What answer will the Minister give us in the House on the allegation made? The workers are making this allegation now but it was made in the House previously and was not adequately responded to by the Government.

Éamon Ó Cuív (Galway West, Fianna Fail)
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As I stated, the Department will defend this action vigorously.

Róisín Shortall (Dublin North West, Labour)
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Foolishly.

Charlie O'Connor (Dublin South West, Fianna Fail)
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Proceed Minister.

Éamon Ó Cuív (Galway West, Fianna Fail)
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All I can say is that the Department will defend the action vigorously and believes we have complied.

Olwyn Enright (Laois-Offaly, Fine Gael)
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Has the Minister taken into account-----

Éamon Ó Cuív (Galway West, Fianna Fail)
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I cannot-----

Olwyn Enright (Laois-Offaly, Fine Gael)
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The Minister can answer on the generality. Has he taken into account the judgment in the Robins case in the UK which gives the impression that the Waterford Crystal workers should be entitled to a greater share than they are receiving? Those staff feel utterly abandoned. They have received no support. Changes were made to the pensions legislation at that time which utterly ignored the situation in which they found themselves. They did not come out any better as a result. I will ask the Minister specific questions on the directive. Does he believe the directive has been adequately transposed and that he will win the case? There seems to be very strong evidence that he will not and that he will put the country to enormous expense and that the result will not be as he expects.

Éamon Ó Cuív (Galway West, Fianna Fail)
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I can answer the general question. A report from the Commission on 15 June 1995 analysing national laws transposing the directive found that in the case of Ireland there was no cause for objection. The Commission found that all of these provisions appear to meet the requirements of Article 8. Following the ruling in the Robins case, the Commission published a working document in April 2008 which essentially described how each member state had transposed the directive. It did not assess the conformity of the measures in place with the obligations imposed by Article 8 of the directive. It concluded that further investigation is needed to address how to protect employees and retired persons against the risk of underfunding of pension schemes and to what extent; how to guarantee any unpaid contributions to the pension schemes; and how to deal with cases where supplementary pension schemes are managed by the employers themselves. The Department is awaiting the outcome of this investigation.

Olwyn Enright (Laois-Offaly, Fine Gael)
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When will the outcome of that investigation be made available? Time and again in the House we hear that we are awaiting an outcome. A report was done on FIS, on which I asked a question, and we are still awaiting the outcome of that. Outcomes are what we are meant to be about here but we do not seem to know. The duty under Article 8 of the directive is to protect employees in insolvency situations. Getting 20% of the pension one paid into and expected to receive is not a protection.

Éamon Ó Cuív (Galway West, Fianna Fail)
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I cannot answer on this situation because the Commission is conducting it.

Olwyn Enright (Laois-Offaly, Fine Gael)
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That lets the Minister slightly off the hook but he can certainly hurry it on. He will not be able to rely on that in court.

Róisín Shortall (Dublin North West, Labour)
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A case has been taken against the Minister.