Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

Amendments Nos. 2 and 4 relate to superannuation schemes.

Amendment No. 2 refers to section 23 which deals with the superannuation schemes of the Shannon group. This is a technical amendment. When the provisions in section 34 relating to "replacement schemes" were deleted a reference in section 23(8) to a "replacement scheme" was overlooked in error and ought also to have been deleted on that occasion. This amendment made that deletion.

Amendment No. 4 relates to section 34. I know that this section attracted considerable debate and discussion in the Seanad and the Dáil. The section deals with superannuation schemes in the State airport authorities and also contains provisions to facilitate amendments, by the trustees, to the Irish airlines superannuation scheme. There were several substantial amendments made in the Dail, some of which reflect points made by Senators on earlier Stages. I will highlight these for the House.

Section 34 was restated in its entirety to provide for greater clarity. The original section 32A, which is to be inserted into the 1998 Act, was divided into two separate sections. These are now the new sections 32A and 32B. To address concerns raised in this House regarding the power provided to employers in the scheme to unilaterally withdraw their members from the IAS scheme, the provisions dealing with "replacement schemes" have been deleted. In addition, the three subsections which referenced Cork Airport in the context of new pension arrangements have been deleted. Those provisions were intended to give clarity around how any new pension arrangements in the Dublin Airport Authority would be divided between DAA employees and those of a future Cork Airport authority, if and when Cork Airport is separated from DAA. Those provisions gave rise to a certain degree of confusion and misunderstanding and for that reason they were deleted.

Senators will recall that under section 32B(1)(a) the trustees will have the power to amend the provisions of the IAS scheme to cease any further accrual of benefits under the scheme and to simultaneously cease the contribution liability of both members and employers. Another amendment to this section means the exercise of this power is now subject to a commencement order. At the request of the trustees section 32B(2) was added to make it clear that if and when they exercise their powers under section 32B(1)(a) the trustees and the IAS scheme itself will have no obligation to provide benefits under the scheme in respect of future service.

While one could argue that this is self-evident within subsection (1), we had no difficulty with providing the further clarification contained in this amendment, which also requires the trustees to act honestly and reasonably when exercising their powers under that subsection.

A further amendment was the addition of the new subsection (5) to section 32B. This subsection disapplies statutory revaluation, as provided for under section 33 of the Pensions Act 1990, from the IAS scheme in the context of the particular proposals which are the subject of current discussions among the members to resolve the difficulties with this scheme. An element of those particular proposals is the removal of the impact of statutory revaluation on preserved benefits so that the future liabilities of the scheme can be locked down. However, under this amendment, revaluation cannot be disapplied in isolation from a decision by the trustees to cease contributions and benefit accruals from subsection 1(a) of 32B - this is a prerequisite for the disapplication of revaluation. In addition, the operation of this amendment has been made subject to a separate commencement order. These safeguards will ensure that revaluation under the Pensions Act will continue as normal and until its disapplication forms part of an overall solution to the problems of the scheme. If, for any reason, it does not ultimately materialise as part of a final solution, this provision will not be commenced. However, we want to make sure there is no legislative barrier to any resolution of the IAS scheme difficulties that is agreed among the parties.