Liz McManus (Wicklow, Labour)
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Question 380: To ask the Minister for Enterprise, Trade and Employment if he has received a letter from a person (details supplied) in County Wexford; if he will contribute towards the southern Ireland pension scheme of former employees of a company; his views on this letter; and if he will make a statement on the matter. [3639/07]

Micheál Martin (Cork South Central, Fianna Fail)
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I have seen the letter referred to in the Deputy's question. The letter focuses on a recent confirmation that members of the Richardsons Fertilisers Staff Retirement Benefits Plan have been deemed eligible for support under the UK Government's Financial Assistance Scheme for insolvent pension schemes. Accordingly, it appears that members now have the prospect of receiving up to 80% of their pension entitlements.

At the time IFI went into liquidation, the Richardsons scheme (covering the employees in Belfast) had a significant shortfall and was not in a position to pay active members (i.e. the employees still working at the time the company ceased operations) their full entitlements. The regulations applicable in Northern Ireland require that existing pensioners are given priority and, as a result, they were largely unaffected by the shortfall in the fund. It had been suggested that the active members could receive a figure as low as 25% of their accrued benefits. However, it is understood that this estimate did not take account of any recovery from the liquidation on foot of the claim made by the trustees of the scheme. I understand that the liquidator, acting on legal advice, admitted this claim and that he has paid out some €7m to the trustees in respect of this claim to date.

The specific financial position of the Richardsons' scheme appears to have arisen primarily from a combination of the statutory rules which applied on the winding up of a pension fund in the UK at the time IFI went into liquidation 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. New regulations were introduced in the UK in 2005 to enhance the protection for members of defined benefit pension schemes in insolvency situations. The Financial Assistance Scheme was established to address difficulties arising in schemes prior to the introduction of the new regulations.

In relation to the employees in the Republic, it is my understanding that the two main schemes covering them had sufficient funds to meet all of the entitlements provided under the scheme, as well as pensions increases of up to 3% per annum. While staff had hoped to receive some additional benefits, it would appear that the payment of such discretionary benefits was always subject to sufficient funding being available to meet the costs involved. Against this background, I do not believe that an Exchequer contribution to the pension funds is justified and I have no plans for any such contribution.