Written answers

Wednesday, 13 December 2006

Department of Social and Family Affairs

Pension Provisions

10:00 pm

Photo of Bernard AllenBernard Allen (Cork North Central, Fine Gael)
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Question 242: To ask the Minister for Social and Family Affairs if his attention has been drawn to the complaints lodged to the Ombudsman regarding the conduct of his Department and the Pensions Board which is under his responsibility complaining that his Department has failed in its obligation to defend retirees' interests and to ensure the integrity of a pension scheme being operated by a company (details supplied) and that his Department was aware of the problem for four years and failed to take corrective action in the workers' interests. [42996/06]

Photo of Séamus BrennanSéamus Brennan (Dublin South, Fianna Fail)
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I am aware of the circumstances of the case to which the Deputy refers and of the complaint recently lodged with the Public Service Ombudsman and previously investigated by the Pensions Ombudsman. The case has also been discussed before the Joint Oireachtas Committee on Social and Family Affairs. The case relates to a provision of section 48(3) of the Pensions Act 1990, which enables the trustees of a pension scheme in wind-up to make a transfer payment to another occupational pension scheme without the consent of the members rather than to purchase an annuity on behalf of the retired members.

My Department has responded to enquiries received from one of the retired members of the scheme in question and to representations made on his behalf. The scheme member has expressed dissatisfaction with the action taken by the trustees of the executive pension plan to secure his benefits after deciding to wind up the scheme in July 2002.

The trustees chose to exercise their right under section 48 (3) of the Pensions Act 1990 to transfer his membership and the payment of his pension to the staff pension scheme. The Pensions Board advised the scheme member on a number of occasions that it is satisfied that the trustees acted in accordance with the provisions of the Act in discharging the liabilities of the scheme in wind-up. I understand that to date no financial loss has been suffered by any of the retired members of the scheme.

Under current actuarial guidance, which entered into force after the particular executive scheme was wound up, the full actuarial cost of purchasing an annuity on behalf of pensioners of a scheme in wind up must now be transferred to the new scheme.

Arising from this case the Pensions Board conducted a review of section 48(3) of the Pensions Act. It is considered that this section should be amended to require advance disclosure by trustees to scheme members, of their intention to wind up a scheme and to make a transfer payment to another pension scheme. While there has been no evidence of any widespread abuse of this particular provision of the Pensions Act, I.will examine its operation further, taking account of the views of the Pensions Board and the Pensions Ombudsman.

The next opportunity to make an amendment to the Pensions Act, if required, will be by way of the Social Welfare and Pensions Bill, due to be published in early 2007.

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