Clare Daly (Dublin Fingal, Independent)
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9. To ask the Minister for Social Protection his views in relation to whether he is concerned, particularly with the quickening demise of occupational pension schemes, that inadequate governance can lead to employers unilaterally closing down pension schemes without consulting and negotiating with all those who are affected by these actions, not just trade unions but those who may appear not to be allowed have representation, namely, pensioners and deferred members; his plans for same; and if he will make a statement on the matter. [28777/16]

Eugene Murphy (Roscommon-Galway, Fianna Fail)
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I am sure that none of the Deputies would like to take up Deputy Clare Daly's time. She is entitled to it.

Clare Daly (Dublin Fingal, Independent)
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I thank the Acting Chairman. This question relates to pensions governance, in particular the role of trustees, including corporate trustees. It concerns workers who make contributions in order to have decent retirement incomes but where decisions are made that affect their livelihoods in retirement and deplete their returns. These workers are basically disenfranchised from having any control over the trustees who, by virtue of their decisions, enrich themselves. What plans does the Minister have to improve pensions governance in this regard? I will cite an example after his reply.

Leo Varadkar (Dublin West, Fine Gael)
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As the Deputy is aware, the decline of defined benefit pension schemes accelerated during the financial crisis to the extent that the whole pension sector was possibly at risk. In recent years, the Government has amended pension legislation to protect the pension sector and ensure fairer and more equitable outcomes for all members of schemes.

Neither the Minister for Social Protection nor the Pensions Authority has the power under legislation to intervene to freeze the winding up of a scheme or to compel the employer to make contributions to a scheme. Almost all Irish defined benefit schemes have a rule that allows the employer to cease contributions, usually after a notice period. There is no legislative obligation on the employer to make contributions and no further liability on the employer where contributions cease. Neither is there an obligation on the employer to give notice to members or to consult in advance of ceasing contributions. However, in the case where a restructuring of benefits is proposed, pensioners, deferred scheme members and unions must be kept informed by trustees. Furthermore, changes made in 2015 require trustees to notify groups representing the interests of pensioners and deferred scheme members in a scheme in such a situation.

The Department and the Pensions Authority are working on proposals for the reform and simplification of pensions, the purpose of which is to impose higher standards on all occupational schemes. Standards in respect of pension schemes will be further enhanced by the transposition of the new IORPS II directive within the next two years.

Clare Daly (Dublin Fingal, Independent)
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I am not sure if the question was clear and I do not expect the Minister to be on top of every example of a pension scheme, but I will put a scenario to him and he might advise on how it can be addressed.

The Aer Lingus supplementary pension scheme was attached to the defined benefit Irish Airlines Superannuation Scheme, IASS. The IASS closed and, as a result, the Aer Lingus scheme closed and was frozen. That was over two years ago. The fund contains more than €108 million and has approximately 2,500 members. The trustees have delayed the winding up of the scheme. As the Minister knows, a wind-up process can take up to a year. In that time, workers have retired. The individual amount assigned to each worker is approximately €45,000 and retiring members could have got an enhanced lump sum of €25,000. The trustees have deliberated and got stipends for themselves beyond the scheme's time. They have turned the money into cash, which means that the scheme is losing money, and they are getting professional advice paid for from the scheme - pensioners' money - on how to indemnify themselves. The pot is getting smaller and the workers are losing out, but there is no vehicle for them to have a say over what is being done with their money. Is there anything that we can do to deal with this issue? I do not expect the Minister to know about the situation, but this is true.

Leo Varadkar (Dublin West, Fine Gael)
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I am not sure, to be honest. I am not familiar with that scheme. If the Deputy wants, I can set up something between her and my officials to tease the issue out and see if anything can be done.

The fundamental job of trustees is to look after the interests of the people who are the fund's beneficiaries. Generally, but not always, the trustees are selected from among those people. One would expect there to be representatives of the pensioners, deferred members and the employer among the trustees. Exactly why they are not looking after the interests of the people whom they are supposed to be looking after I cannot say, unfortunately.

Clare Daly (Dublin Fingal, Independent)
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One would expect that. Some of them are retired members of trade unions who are earning pensions of approximately €100,000 per year. The workers have not had a say in reselecting them since the scheme was established. The wind-up is being delayed because the trustees are seeking an indemnification against being sued. They are getting professional advice from the likes of the fund's administrator, Mercer. They are getting stipends of up to €40,000 per year for each of the schemes in which they are involved. They only meet a couple of times per year. They are feeding off a fund that is being turned into cash while the members who contributed to it effectively have no recourse to address the trustees' lack of action in this situation despite the fact that the trustees publicly stated that they would wind up the scheme. It is like legitimised theft in some ways. Every delay is making these pensioners poorer.

Will the Minister's officials sit down with us? I do not know what clout they have, but surely someone can say that this is not on or make a legal challenge. What is happening is not right. There must be some way to deal with it.

Leo Varadkar (Dublin West, Fine Gael)
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I do not want to comment on any individual scheme without knowing anything about it, but the members may have recourse, if not through the Pensions Authority, then through the courts. I will not pretend to be an expert in this area. It is a complicated one and I am only getting my head around the legislation, but I will ask one of my officials who understands this area well to make contact with the Deputy in order to determine whether something can be done to assist in this case.

Clare Daly (Dublin Fingal, Independent)
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That would be fine.