David Cullinane (Sinn Fein) | Oireachtas source

It is helpful for the Minister, and they are grouped anyway. Before I deal with the deferred pension issue and the Irish airlines superannuation scheme, IASS, I want to commend the Minister for reaching an agreement with the former Waterford Crystal workers. I know Kevin Mulvey was involved as well in terms of trying to get a resolution for those workers. This was a case of a double insolvency.

What we are talking about in terms of the last discussion are single insolvencies but regarding the double insolvency, we have now transposed the EU directive, which should have been done in the past, and we have a resolution for the former Waterford Crystal workers, which was unanimously adopted by the workers themselves. I want to put on the record my appreciation for the work the Minister has done in this area but full praise must go to the workers themselves who, unfortunately, were forced to take a court case, not relating to this Government but the previous Government. They had no choice but to take the State to court.

I wonder if the European Court of Justice had not ruled the way it did would the workers have got the settlement awarded to them. Unfortunately, they were forced to take the State to court but they should never have been forced to do so. There are lessons to be learned from that in terms of the way we deal with pension schemes. I commended the Minister for the Waterford Crystal payout, which is good news for the workers, but the Minister would appreciate the desperate situation in which deferred members of the IASS are being left, not just those in Aer Lingus. Deferred members of defined benefit schemes are vulnerable generally, given their exclusion from the industrial relations process, and the current legislation offers grossly inadequate protections.

I support any amendment which ensures that the deferred members are not impacted on disproportionately in any scheme restructuring. There has to be a fair way to restructure the scheme. I have no difficulty with an associated appeals mechanism - that is only right and appropriate - and also enabling participation of representatives of deferred members in such appeals. We have had lengthy debates on this issue in the past. Last year we debated it also, and there have been lengthy debates in the Dáil as well.

Deputy Ó Snodaigh's office put a great deal of effort into coming up with an alternative scheme which we felt would be a fair way to deal with this issue. In terms of our priority order and what we believed should be introduced to govern the restructuring or wind-up of deferred benefit schemes, first, a PRSI contributions record that is sufficient to ensure eligibility for the full State pension should be purchased from the Social Insurance Fund for every scheme member who has not attained such a record. Second, provision should be made for 100% of pensioners' benefits below €12,000, excluding post-retirement increases, which deals with the point raised by Senator O'Brien that people on pensions of €12,000 will get much less. That is despicable.

Third, active and deferred members under the age of 55 years should have disbursed to them the lower of 50% or €6,000 of their benefits or, if they are aged over 55 years, the lower of 75% or €9,000, excluding post-retirement increases. Fourth, we made a suggestion regarding 75% of pensioners' benefits exceeding the initial €12,000 up to a maximum of €30,000, excluding post-retirement increases. We also suggested that 75% of active and deferred members' benefits exceeding the initial sum up to a maximum of €30,000, excluding post-retirement increases, be the fifth round, as it were. The sixth round entailed the remaining benefits for pensioners, excluding post-retirement increases. The seventh round entailed the active and deferred members' remaining benefits, and the eight related to the remaining pensioners and active and deferred members.

This is a complicated subject. There is no easy way out of it. There is a responsibility on companies to make sure that pensions are solvent. We cannot have a situation where the State has to pick up the tab every time a pension scheme goes into insolvency. We know that in the case of double insolvencies there is an EU directive which has now been transposed, but there is an obligation on companies to make sure that these schemes are profitable.

The effect of the priority order I have outlined to the Minister that Sinn Féin has proposed would ensure a much fairer distribution of funds for everyone in the event of a wind-up or restructuring, regardless of whether a pensioner was in payment, a deferred member or an active member, and it would offer greater protection to deferred members of, for example, the Irish airlines superannuation scheme or any of the other schemes in a similar position.

I urge the Minister to consider changing the Bill. We wanted a separate social welfare and pensions Bill to arise out of this Bill to deal with the issue in a more substantial way. I accept it is complicated and there are no easy solutions but the proposal we have made, the details of which I have read into the record, is in recommendation No. 10 which, unfortunately, was ruled out of order. However, I have made my point. I will conclude by commending the Government for doing the right thing at long last for the former Waterford Crystal workers.