Joan Burton (Dublin West, Labour) | Oireachtas source

-----for whom I have great sympathy. I have sympathy for anybody suffering any reduction in their pension entitlements. It is a very great difficulty for many of the people involved. As has been said, when we had the discussion last year we set out to seek to protect in so far as possible defined benefit pension schemes, many of which have been in severe deficit for reasons which may have to do with the performance of equities, general disturbances in financial markets in recent years and other reasons which may have to do with the way in which particular pension funds are managed and organised. I heard in some of the contributions suggestions that people were offered deals on their pensions, as Senator Conway stated, to leave the company. The issue is whether these deals were funded. This is the critical problem with regard to this. As people referenced, unfortunately the deficit involved in this particular pension scheme is just under €800 million.

With regard to defined benefit pension schemes funding in general, in 1997 there were 2,242 defined benefit pension schemes which were subject to the funding standard. At the end of 2007, the number had dropped to 1,319. At the end of 2013, the number of schemes was 890. I want to be clear that 96% of the schemes either meet the funding standard or have submitted a funding proposal to the Pensions Board and the remaining schemes are in dialogue with the Pensions Board.

Part of the reason for the legislation which was passed last year was to seek to get those pension funds over the line to protect to the maximum extent possible the very important pension benefits which members of the fund expected to get. I reiterate that the changes in the structure set out in last year's Act was that anyone with a pension of under €12,000 would have 100% protection. In addition, most people who are in a defined benefit scheme would also have a social insurance contribution record which would entitle them to a State pension valued in the region of €12,000 to €14,000. Therefore, the protected payment, between the defined benefit scheme and the State contributory retirement pension, would amount to something above €24,000. The actuarial information relating to Ireland shows that the average figure is €11,000 in defined benefits or in many cases is significantly below that amount.

The second element of the scheme relates to people with an income from a pension of between €12,000 and €60,000, where the reduction would be in the range of 10%, if necessary. For people with a pension of above €60,000, the reduction would be 20% or up to 20%, as necessary, to get the scheme back.

I accept Senator Cullinane's comments and approval of the Waterford Glass scheme. It is ironic to listen to the Fianna Fáil Senators because Waterford Glass, which was the iconic industry of the south east, became insolvent and came to an end in 2009. Unfortunately, the pension fund was insolvent. The then Fianna Fáil Government-----