Joan Burton (Dublin West, Labour) | Oireachtas source

I thank the Senator. Significant efforts have been made to identify an approach that strikes a reasonable balance between the interests of pensioners and the active and deferred members of scheme portfolios and scheme structures. To ensure that the broadest range of views and expertise was considered, the consultation process during the review of these provisions included a stakeholder consultation forum in late 2012 for those representing older people and pensioners, the pensions industry, employers, trade unions, older representatives attending the ISCP, Age Action Ireland and the National Federation of Pensioners' Associations. Written submissions were also sought from the groups and informed the review process when received. The Department engaged external technical and actuarial specialists to undertake modelling exercises that assisted in the review process.

It should be noted that current and former members of pension schemes are collectively protected by a broad and detailed range of measures. The trustees of defined benefit pension schemes have a fiduciary duty under trust law and the Pensions Act to act in the best interests of all scheme members. If they do not, how they carry out their duties may be contested. It is an onerous responsibility under trust law.

The Pensions Board provides further regulatory safeguards and oversight, some of which I have already mentioned. Scheme trustees must apply to the Pensions Board before it can reduce benefits. Before trustees make their application, they must consult the employer, the scheme members, any person receiving benefits from the scheme and the authorised trade union representing scheme members. Trustees must also undertake a comprehensive review of the scheme with a view to its long-term stability and sustainability. The review must cover the benefits payable under the scheme, the options available for reductions in benefits and their impact on the different categories of members and other people, the contributions required, the options for increasing those contributions, the employer's attitude to any request for increased contributions, and the long-term investment strategy, including the future risks for the scheme, the possibility that the scheme will prove more expensive than anticipated - whether this is due to underperforming investments, increased longevity or anything else - and what measures could be available to the trustees in these circumstances, such as contribution increases or changes to discretionary benefits. The trustees must have requested from the employer contributions sufficient to ensure long-term stability and application and the employer must have declined to pay those contributions. Trustees are required to take legal advice on their powers and duties and on the obligations on employers to contribute to the scheme. The trustees must notify in writing all of the members of the scheme and any other person in receipt of benefits. They must also advise in writing authorised trade unions and give them the details of the context in which the potential changes arise.

Revising a scheme is a fairly exhaustive and technically difficult process. Unfortunately, sacrifices have been made in scheme restructuring to ensure those schemes' sustainability. Discussions between the parties to pension schemes is intense, but what has been provided for is appropriate. Therefore, I am not in a position to accept the amendment.