Liz McManus (Wicklow, Labour)
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Question 76: To ask the Minister for Enterprise, Trade and Employment the position regarding the liquidation process for a company (details supplied); if he has satisfied himself that all possible steps have been taken to protect the interests of former employees of the company, who lost their jobs as a result of the liquidation of the company; if, he has any information as to the proportion of pension entitlement that former workers, including those in Northern Ireland, are likely to receive; and if he will make a statement on the matter. [18017/05]

Micheál Martin (Cork South Central, Fianna Fail)
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I understand that the liquidator has made considerable progress in realising the assets of the company and establishing the full extent of its liabilities and that he hopes to complete the liquidation process later this year. At this stage, the production sites at Arklow and Cork remain the principal assets yet to be realised. It is understood that contracts have been signed for the sale of both sites and that it is hoped that the sales will be closed over the coming months. It is a matter solely for the liquidator to determine whether to accept any particular offer made.

The State has made a significant financial contribution to assist the former employees of Irish Fertiliser Industries. Following the decision by the board of IFI to put the company into liquidation, ICI and the State, the shareholders in IFI, while there was no legal obligation to do so, established a special fund with almost €24.5 million to provide ex-gratia severance payments to the former employees of IFI. Payments from the fund were made were in accordance with the basis for distribution determined by the trustee of the fund, which has been endorsed by a ballot open to all employees.

In addition, the liquidator has admitted, as unsecured creditors in the liquidation, claims from the employees of the company to have entitlements in respect of the voluntary severance terms traditionally paid by the company. However, the dividend payable to the workers concerned, if any, can only be determined when all the assets of the company have been realised and all liabilities established. It must be emphasised, of course, that the amount, if anything, to be paid in due course in respect of such claims is a matter solely for determination by the liquidator.

As regards pensions, I understand that the two main schemes covering employees in the Republic have sufficient funds to meet all of the entitlements provided under the schemes. While I understand that the schemes may not be in a position to provide some additional discretionary benefits that members had hoped to receive, it would appear that the payment of such benefits would always have been conditional on sufficient funding being available to meet the costs involved.

I am aware that employees based in Belfast, who are deferred pensioners of the Richardsons pension fund, are likely to receive much reduced pension entitlements. The specific financial position of the Richardsons fund appears to have arisen primarily from a combination of the statutory rules which currently apply on the winding up of a pension fund in the UK and a shortfall in the assets of the Belfast fund compared with its liabilities as a result of the fund trustees' investment strategy coupled with a significant fall in the equities market.

I understand that the liquidator has accepted, in principle, that a claim on the liquidation, submitted by the trustees of the Richardsons scheme, is admissible. However, the amount of claim has yet to be established while the amount that might be recovered from the liquidation in due course will depend on the dividend rate for unsecured creditors generally. In addition, I understand that the UK Government has announced proposals to deal with the issue of pension shortfalls arising from insolvencies but I am not aware of the impact, if any, this may have on the shortfall in the Richardsons scheme. Depending on the outcome of these developments, there is the prospect of some alleviation in the position faced by the active members of the Richardsons scheme.

While I have the utmost sympathy for the plight of the members affected by the shortfall that has arisen in the scheme, I am satisfied that the Government does not have any obligations in respect of the shortfall that the pension scheme faces.