Brian O'Shea (Waterford, Labour)
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Question 97: To ask the Minister for Social and Family Affairs if his attention has been drawn to the situation whereby many companies with defined benefit pension schemes are unilaterally changing the terms and conditions of those schemes to defined payment schemes; the number of companies who have informed his Department regarding these changes; if he has undertaken to ensure that employees affected by these changes to their pension schemes have been properly informed of the consequences of those changes; the action his Department has taken in relation to this matter; and if he will make a statement on the matter. [37606/06]

Séamus Brennan (Dublin South, Fianna Fail)
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The provision of occupational pensions in this country is on a voluntary basis and depends on the willingness of employers to contribute to, and maintain schemes for their employees. Traditionally, such schemes were organised on a defined benefit basis. However, in recent years defined benefit provision has been under pressure because of volatility in the stock markets, increasing liabilities arising from demographic pressures, low interest rates, increasing wage costs that translate into higher benefits, and regulatory requirements. New accountancy standards, which make pension liabilities transparent on a company's balance sheet, are also contributing to the pressures under which defined benefit schemes are now operating.

A drift from defined benefit to defined contribution schemes is now apparent, even in cases where firms are very profitable. This is, in my view, a regrettable development. There are no accurate statistics available on the number of schemes that are introducing change as, unless the defined benefit scheme is actually being wound-up, there is no requirement to notify the Pensions Board of alterations to the terms of a pension scheme. However, some commentators suggest that up to 40% of defined benefit schemes may already be closed to new members.

There is no provision within the Pensions Act 1990 for employers to consult with employees in relation to proposed changes to schemes though, in many cases, I understand that this happens as part of the normal industrial relations processes within companies.

The Pensions Act and the associated Regulations provide for a range of information in relation to a scheme to be made available to scheme members so that they can monitor their benefits and the financial soundness of their scheme. Certain basic information, mainly about the contribution and benefit structure of the scheme must be given by the trustees to every member on joining the scheme and to members and other specified persons on request. Material alterations to a scheme must also be drawn to the attention of members.

The Government has committed itself to producing a Green Paper on pensions as part of the new social partnership agreement Towards 2016. The Green Paper will outline the major policy choices, the challenges in this area and the views of the social partners.

Also, as part of the agreement the Pensions Board has been asked to research benefit design options in the occupational pensions area and to examine current design issues in both defined benefit and defined contribution arrangements with a view to producing guidance as to designs which encompass the positive elements of each arrangement while adjusting the costs and risks to the parties involved. It is intended that the Board's report will be published and made widely available as an information guide to all those involved in pension schemes.

It is my intention to produce the Green Paper by the end of March next year. A consultation process will follow this and the Government will respond to these consultations by developing a framework for comprehensively addressing the pensions agenda over the long-term.