Averil Power (Fianna Fail) | Oireachtas source

I move amendment No. 17:

In page 31, between lines 24 and 25, to insert the following:
"34. The Air Navigation and Transport (Amendment) Act 1998 is amended by inserting a new section 32A as follows:

"32A. The IAS scheme shall not be allowed to close its pension scheme except where the scheme has reached a minimum 90 per cent funding standard.".".

The Minister referred to this amendment when discussing the Bill last week. Essentially, it provides for a recommendation made by the OECD report on pensions which recommended that in a single insolvency situation where the pensions scheme is insolvent but the sponsoring employer is not, the company should not be able to walk away from the scheme unless the assets in the scheme cover 90% of the pension liabilities. It is incredibly unfair that a company that is still profitable would be allowed walk away from a scheme without ensuring that proper financial provision has been made. The IAS scheme, a scheme into which employees paid contributions from their wages over extended periods, was used for redundancy payments in SR Technics and to incentivise early retirements from the Dublin Airport Authority and Aer Lingus. The employees were given an assurance that they were members of a direct benefits scheme.
We are in a situation where on foot of the legislation the Minister for Social Protection, Deputy Burton, introduced, to which I objected at the time, and the proposed section in this Bill, the IAS scheme will not only be able to wind up without the consent of the employees, under the earlier section which we discussed and voted on last week, but the employers will be able to walk away from the scheme without ensuring it is adequately funded. Whatever about a double insolvency position where the company is insolvent and does not have the money to make up the difference, it is wrong that a financially viable and profitable company should be able to throw people's terms and conditions out the window and close a scheme, into which those employees had paid over an extended period without making proper financial provision.

This is why we are tabling this amendment. It is based on a recommendation by the OECD, which is an expert on pension provisions across OECD companies. Unfortunately, the Government voted against an amendment we moved last week which would have ensured the IAS scheme could not simply be closed down and people's entitlements thrown out the window without their consent. We put the issue to a vote and the Government Senators voted against it. The least we should do now is to ensure that a scheme cannot be wound down unless it is properly funded and the employers' take their fair share of the responsibility for it by ensuring sufficient assets are available to meet liabilities.