Pat Gallagher (Donegal, Fianna Fail)
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The next topical issue is in the names of Deputies Broughan, Clare Daly and Jack Chambers. Each Deputy has one minute.

Clare Daly (Dublin Fingal, Independent)
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I know Deputy Chambers cannot be here, so can we have two minutes each? It would only be the same as the length of the Minister's reply.

Pat Gallagher (Donegal, Fianna Fail)
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I will give you a minute and a half each.

Tommy Broughan (Dublin Bay North, Independent)
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Last Wednesday, my colleague, Deputy Daly, hosted a briefing by members of the Aer Lingus supplementary pension scheme, known as the second scheme, to discuss the serious issues that have emerged relating to the wind-up of the scheme. I attended the briefing. I understand that up to 2,500 workers and pensioners are entitled to a share of the €106 million pension fund, known as Pot B or the Second Scheme, that is currently being wound up.

Members of the scheme raised concerns when they began receiving letters detailing their allocations. They soon realised that there did not appear to be any rhyme or reason to the method of distribution of funds. The distribution had been decided without consultation by the trustees, Irish Pensions Trust.

The second Aer Lingus supplementary scheme was in operation from 2007 to 2014. Aer Lingus paid 4% of pensionable salary on behalf of employees and employees paid 2% in all. Additionally, the Government provided €34 million from the sale of Aer Lingus. It is striking to note the decline in the value of the fund by €2 million to 31 March 2016 and the fact that administrative expenses increased by over 100% between 2015 and the wind-up. When the wind-up was mooted, members believed they would receive their allocated contributions and a fixed percentage of the performance of the scheme, but that has not happened. There has been a total lack of consultation with members. The proposed distribution seems erratic, inconsistent with the principles of the scheme and totally unfair on many members. Deputy Daly gave several examples when she raised the matter with the Taoiseach some days ago.

On behalf of constituents I am calling on the trustees and the regulatory authorities, the Pensions Authority and the Pensions Ombudsman, to investigate the distribution of the second scheme and to explain why no other options were afforded to members, as is usual in many other schemes. Moreover, I want them to explain the accounting and actuarial basis on which the distribution calculation is based. I call on the Minster to ensure such an investigation takes place.

Clare Daly (Dublin Fingal, Independent)
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I know Deputies Chambers and Darragh O'Brien were keen to be here today. They would be singing very much from the same hymn sheet as us on this matter.

This is urgent because the wind-up of the financial interest of the scheme is under way. The scheme was in existence for eight years. As Deputy Broughan has said, workers paid in an average 6% per head, including the employer contribution. A further €34 million was put into the kitty beforehand. The benefits objective was discretionary and there is no requirement for the method that is being used by the trustees now to be implemented. Moreover, there is no impediment to the trustees changing their minds.

What has really aggrieved people is the unilateral decision making. It means every group of people involved in the scheme is being affected. For example, for 394 current pensioners of the scheme, the average weekly benefit comes to 45 cent per week. The trustees propose to buy annuities for this group of pensioners out of their interests. However, annuities are exceptionally pricy at the moment. It would be far better for them to have the purchase of approved retirement funds.

In the case of deferred members, the trustees want to buy pre-retirement bonds, most likely, with one of the big insurance companies. The trustees have advised that if a member wants to transfer out of the pre-retirement bonds that the trustee has chosen, there will be a fee to opt out. There has been no discussions whatsoever.

As we discussed last week, there has been incredibly unfair distribution of the financial interest. People of a similar age who have made similar financial contributions will be subject to major differences in returns. As I said last week, one class can put in €10,000 and get back €12,000, while another can put in €22,000 and get back €84,000. There is a method in place, but it is an unfair method. We urge and hope the Minister and the Department can intervene with the Pensions Authority in respect of these matters.

Regina Doherty (Meath East, Fine Gael)
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I thank the Deputies present and those Deputies absent as well. I know it is a particularly rife issue in the environs of Aer Lingus and the constituencies that touch it.

I wish to outline that the trustees of any scheme have duties and responsibilities under trust law, other relevant legislation and the Pensions Act 1990, as amended. The duties of pension scheme trustees include administering the trust in accordance with the law and the terms of the trust deed. Consequently, any decisions made by corporate or individual trustees of an occupational pension scheme are governed by the relevant legislation.

Trustees have a basic obligation to carry out their duties in accordance with the law and the terms of the trust deed and rules. Most important, they are obliged to act in the best interests of all scheme beneficiaries, whether deferred, active or those receiving a pension - this is probably what is most relevant to this case.

An active member who is elected as a trustee has to act in the best interests of all members. If there is a conflict of interest, then the person's duty as a trustee must take precedence over other interests. If it is considered that benefits due are not being paid in accordance with the rules of a pension scheme, the member concerned can invoke the dispute resolution process and procedures that the scheme is obliged to operate. If the member is still dissatisfied, she can bring the complaint to the Pensions Ombudsman or the Pensions Authority.

I trust Deputies appreciate that, in my position, I cannot comment or intervene directly in the pension arrangements applying to a particular scheme. However, where issues that cause concern relating to a particular scheme are raised with me, as in this case, I can notify the Pensions Authority and ask those responsible to intercede. I wish to confirm for the Deputies present and absent that the matter relating to this particular scheme has been raised with my Department. In turn, we have raised it with the Pensions Authority, which has agreed to examine it and come back to us with a report. The Pensions Authority will assess if there has been a legal breach of obligations and take any necessary action if such a breach has been found.

Although the Pensions Authority is under the aegis of my Department, it regulates pension schemes entirely independently of the Department. Therefore, I am not in a position to influence or comment on the matter, the process or the length of time it will take. I can say that when this concern was brought to authority officials last week they were happy to intervene and address the concerns to the trustees. We await a response. I hope that clarifies the matter for the Deputies.

Tommy Broughan (Dublin Bay North, Independent)
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I welcome what the Minister has said in respect of the Pensions Authority. The Taoiseach gave a commitment to Deputy Daly that the Minister would organise a meeting with her and the other two interested Deputies as well as others to see what we could do within the current legal situation.

Will the Social Welfare, Pensions and Civil Registration Bill 2017 address some of the problems which have arisen with the administration of funds, such as the second scheme with Aer Lingus? Is there any conceivable way that the ambit of that legislation could be utilised on current wind-ups? It was disturbing to hear from ordinary members that they did not receive annual benefit statements. People seem to be uncertain about how additional voluntary contributions, AVC, are operated. There was no consultation whatsoever on the wind-up. I hope the Minister and the Pensions Authority take action on this and ensure there is not a recurrence in any other scheme and that the current problems are addressed.

Clare Daly (Dublin Fingal, Independent)
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I welcome the Minister's response. She is right that the trustees have huge power in this area and that is where it really rests. That is a legislative shortcoming and I welcome the Taoiseach's remarks last week that the area is under review and that the Pensions Authority is going to look at making sure that trustees behave in a more accountable and transparent way. I welcome that the Pensions Authority has agreed to examine this area. I have a word of warning on that, since we are never happy. This scheme has been delayed in its wind-up for a number of years. Millions of euro have been bled out of it while the trustees waited to decide what to do. The resources were in cash and were effectively losing money. It consumed €2 million between 2015 and 2016 in professional fees and so on, just by sitting there. A further delay runs the risk of that situation. Members are very keen to have the financial interests distributed, but they want them to be distributed in a fair way where staff have options and a way of addressing the matter. That is my word of caution. Hopefully, the intervention by the Pensions Authority will be timely and measured but it is important that we go back to the drawing board on it because while there is a method of distribution, it is one of madness and needs to be changed.

Regina Doherty (Meath East, Fine Gael)
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I was not aware the Taoiseach had promised a meeting so I apologise. I do not know if there is a need for it now but if there is, I am happy to organise it with the relevant people in my Department. I hear what Deputy Daly said. It is not within my gift to put a timeline on the request but I can certainly convey to the authority the details the Deputy has just outlined.

To respond to Deputy Broughan, although the information provided has caused me concern, that does not necessarily mean that anything that has happened is wrong or illegal. Therefore, it would probably not be helpful if I was to concur with the Deputy that further legislation is needed. I will express the concerns regarding the timing to the authority and whatever the outcome of this is will be reflected in any future legislation. The Deputy is aware that our legislation is coming back on 9 November. I am not sure whether we will have it back soon enough to address the issues but I can guarantee the Deputy that, as long as I am sitting here, whatever issues arise, if there are any, from the treatment of this pension fund will be addressed in future legislation.