Darragh O'Brien (Fianna Fail) | Oireachtas source

I thank the Minister for his detailed explanation of the Bill. The Minister is welcome to the House, as always. I intend to focus specifically on the pensions area, which is dealt with in section 33. My colleague, Senator Ned O'Sullivan, who is our transportation spokesperson, will deal with other elements of the Bill. I intend to have a more detailed discussion on the matter on Committee Stage and I will be tabling amendments specifically to set aside or amend section 33, which relates to superannuation schemes, and particularly section 32A of the 1998 Act.

When the Social Welfare and Pensions (No. 2) Bill was going through this House, I debated the Bill directly with the Minister's constituency colleague, the Minister for Social Protection, Deputy Burton. The Government has been going through the process of teeing up the Irish airlines' superannuation scheme and other private pension schemes like it by way of removing fundamental pension rights.

As Minister for Transport, Tourism and Sport, the Minister has said time and again that he cannot get involved in the commercial running of a private company, nor should he. I happen to agree with the Minister on the matter. I will quote specific details presently, but what the Minister proposes to do in the new section 32A in respect of a private company's defined benefit pension scheme amounts to the most fundamental change to pension rights of any pension scheme in Ireland at the moment.

Before dealing with the details of the Bill, I have a question regarding the ongoing discussions to which the Minister referred that are being led by the expert panel. My colleagues, Senator Averil Power and Councillor David McGuinness, the latter a constituency colleague of the Minister, have met a number of people, including former Aer Lingus, SR Technics and Dublin Airport Authority employees, who do not have a seat at the table of the expert panel. That is a massive problem, particularly in respect of deferred members. We are talking about allowing scheme members and employers to transfer members into other schemes in a situation in which one third of the membership - nearly 5,000 members - do not have an employer per seand will, based on the current proposals, take nearly a 50% hit on what they expected to receive under a defined benefit compulsory pension scheme. People who had to join the scheme at age 20 and have paid into it ever since were aware of the difficulties with the scheme. However, deferred pensioners are arguing that they should have a seat at the table of the expert group, which is reporting to Laura Gallagher of KPMG. I am asking the Minister to re-examine this issue. Everybody realises that there is no magic bullet that will solve the deficit issue within the Irish airlines' superannuation scheme, but when one recalls the €1.5 billion of taxpayers' money that was given to AIB to recapitalise its scheme, there are questions that arise.
Returning to the Bill itself, section 32A(11)(b) of the 1998 Act, as inserted by section 33, provides that, "The consent of the members of a company or other employer participating in the IAS scheme or of any other person referred to in any provision of the IAS scheme shall not be required by the trustees for the exercise of the powers conferred on them by this subsection". That is a broad-reaching and very significant provision. While we all wish to see an agreement being reached, the Minister is bringing forward this Bill to facilitate a situation whereby there is no agreement. The subsection is premature and most unhelpful in bringing about an agreed solution among the people who have a stake in the IASS. While we do not intend to oppose the Bill on Second Stage, we will trenchantly oppose the changes the Minister is proposing to bring about with regard to the rights of pension scheme members in the IASS. What the Minister is effectively proposing is that if there is no agreement, any member of the scheme can be transferred to any other scheme or transferred out of the scheme and any rights they had as members will be set aside. This follows on directly from the Social Welfare and Pensions (No. 2) Bill 2013 introduced earlier this year, which I opposed.
I hope the Minister will, at the very least, set aside this subsection, allow negotiations to continue and ensure stakeholders have proper representation at the table. This is particularly important for deferred pensioners. I understand the Retired Aviation Staff Association has been unable to secure a meeting with the Minister. Has that situation been rectified? This is a private pension scheme and the Government, through the Minister, is introducing changes that will remove people's pension rights as members of the scheme. That has not been done in respect of any other defined benefit scheme in this country, but it is backed up by the provisions of the Social Welfare and Pensions (No. 2) Bill. This Government is allowing what is called a single insolvency - that is, the wind-down of an insolvent scheme that was flagged a number of years ago even though the company itself is solvent and profitable. That is what the passage of the Social Welfare and Pensions (No. 2) Bill allowed. We all understand that where a company is wound down and its pension scheme is in deficit, there has to be a winding down and splitting up of the scheme. However, that is not the situation here.

Thankfully, Aer Lingus remains profitable. However, the Minister is allowing it and the DAA to effectively run down the pension scheme. I remind the Minister that in the past and under successive Governments - I am not laying blame solely at the door of the current Administration in this regard - the scheme was used as an incentive to encourage people to retire early from Aer Lingus and the DAA. This was done by means of offering unco-ordinated early retirement. Actuarial reports, benefit statements and annual reports on the scheme indicate that no provision was made to cover the cost of early retirement, particularly that of an unco-ordinated nature, whereby social welfare was not deducted from people's pensions. Management at Aer Lingus used the scheme as a means of reducing the company's workforce. The existing members of the scheme, some of whom I have met, paid into it for 36 or 37 years and were expecting to receive reasonable pensions in return. However, they will now be obliged to contend with significant reductions to these pensions.

While we agree with most of what the Bill contains, I must point to the fact that the section which governs the issue to which I refer will effectively act as a Trojan horse. The Minister is stating he does not care whether anything is agreed at the negotiations which are taking place because the law will, subject to the Oireachtas passing the legislation before us, back him up. If the Bill is passed, what the 15,000 retired and deferred pensioners and current employees paying into the scheme have to say will not matter because the law will be on the side of the Minister. That is my fundamental concern about the section to which I refer. I intend to table specific amendments to it on Committee Stage and, in that context, will be interested to hear what the Minister has to say. Both politically and in the context of the way in which he manages his Department, it is most unhelpful for him to be seeking to have the section in question implemented in advance of the negotiations being concluded. There is no point in people negotiating because all the power will be vested in the company and the scheme trustees who, at the Minister's direction, will substantially reduce pension benefits into the future. That is a major concern for me and my colleagues. Perhaps the Minister might address the matter.