Darragh O'Brien (Fianna Fail) | Oireachtas source

I appreciate that but the amendment relates to one scheme because it was the first scheme to which this happened. The Minister of State's note also made reference to risk-free defined contribution schemes but there is no such thing. Defined contribution schemes are also at risk. The idea that defined benefit is bad and defined contribution is good is nonsense and officials in the Department need to get real about that. Defined benefit schemes are no longer in favour because they cost employers too much. It is as simple as that. According to the LCP pensions accounting briefing, as at 31 December 2014 there was only one defined benefit scheme that was close to 90% funded. In the vast majority of schemes, the funding levels have reduced at a time when investment returns have increased substantially. Why has that happened? It is because all pension funds are going to do this now.

The Minister of State said that in the case of the IAS scheme, the employer made a significant contribution to resolve the scheme's problems. However, he did not mention the fact that the employer and the active members were told not to direct any more funds into the scheme. A new scheme was set up but the liabilities of the original scheme were left with the retired and deferred members and the scheme was starved of funds. We are supposed to jump up and down on hearing that the employer made a significant contribution to the scheme but that is ridiculous. The whole process was designed to fatten up the company and remove the pension liability in advance of the sale of the State's share in Aer Lingus. That is why the Government got involved. It could not float Aer Lingus when it was still saddled with the bulk of the €760 million deficit in the IAS scheme. This process involving the Pensions Authority, the Department, the employer and the Government bordered on collusion. Indeed, I would include the Office of the President in this regard because the President signed this into law in a matter of three days. It was all done to allow the flotation statement to be released and to facilitate the sale of the State's share.