Averil Power (Fianna Fail) | Oireachtas source

I will touch on some of the Minister's closing remarks. He has said the reason this section is being brought forward is that if agreement is reached, the tools will be available to implement it. I share the same concerns of my colleague. What the section does is provide that if agreement cannot be reached, the trustees will have the power to unilaterally bring down people's benefits and transfer them to a less advantageous scheme. It is impossible to see it as anything other than this. It seems to assume that agreement will not be reached and that it is a stick with which to beat pensioners and deferred pensioners. How can they have any faith in supposedly ongoing talks when legislation such as this is being brought forward? If agreement cannot be reached and the situation is unsatisfactory for them, the trustees can do whatever they want, which is incredibly unfair.

The Minister has stated one of the reasons for the section is to give trustees an alternative to winding up the scheme. He has pointed out that under the current arrangements and the changes made in the Social Welfare and Pensions (No. 2) Act, this would be disadvantageous and result in people losing out their benefits in line with the new priority order introduced. When that legislation was going through the Houses, I raised the following issue with the Minister for Social Protection. Whatever about a case involving a double insolvency, where the pension scheme and the company are insolvent and there is simply no money within the company to be transferred to the pension scheme, the Social Welfare and Pensions (No. 2) Act provides for situations where an extremely profitable company can wind up its pensions scheme because it is going through temporary financial problems, as the markets have dropped as they have in the past few years, and walk away from it, regardless of any commitment previously given to staff. This is unfair, which is why we have tabled an amendment to apply the OECD's recommendation that in a case involving a single insolvency where a company is still solvent and profitable, it should be unable to walk away from a scheme where pensions form a key part of its employees' and former employees' terms and conditions. It should not be able to tear up these entitlements, unless the scheme has reached the 90% funding standard.

The Minister spoke about how the need to have an alternative to the winding up of a scheme was the reason for this section. I suggest a better way of dealing with the matter is to accept our amendment which would ensure that in a case involving a single insolvency, employees would not end up in such a disadvantaged and unfair position.