David Stanton (Cork East, Fine Gael)
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Question 457: To ask the Minister for Social and Family Affairs the reasons for his support of the UK Government in the recently decided European Court of Justice Case C278-05; his views on the recent decision and the implications for Ireland; and if he will make a statement on the matter. [4713/07]

Séamus Brennan (Dublin South, Fianna Fail)
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The case to which the Deputy refers, relates to Directive 80/987/EEC which provides for the protection of employees in the event of the insolvency of their employer. The High Court in the U.K. referred a case to the European Court of Justice for a preliminary ruling on whether Article 8 of this Directive requires "Member States to ensure, by whatever means necessary, that employees' accrued rights under supplementary company or inter-company final salary pension schemes are fully funded by Member States in the event that the employees' private employer becomes insolvent and the assets are insufficient to fund those benefits".

Article 8 of the Directive requires that "Member States shall ensure that the necessary measures are taken to protect the interests of employees and of persons having already left the employer's undertaking or business at the date of the employer's insolvency in respect of the rights conferring upon them immediate or prospective entitlement to old-age benefits, including survivors' benefits, under supplementary company or inter-company pension schemes outside the national statutory social security schemes." However, under article 4(3), the Directive elsewhere allows Member States to limit the liability of the guarantee institutions.

In Ireland, Article 8 of the Directive was implemented by Section 7 of the Protection of Employees (Employers' Insolvency) Act 1984. This provides that in the event of an employer's insolvency, any contributions deducted from any employee in the 12 months prior to insolvency and which remain unpaid, and any contributions due to be paid by the employer into the scheme in the 12 months prior to the insolvency (unless a lesser amount would discharge the liabilities) may be paid from the Social Insurance Fund into the occupational pension scheme.

In addition to the measures taken to implement this Directive, existing provisions are in place under the Pensions Act 1990 to protect members' benefits under occupational pension schemes. Part IV of the Pensions Act 1990 sets out a minimum funding standard for defined benefit pension schemes. This is a wind-up standard, based on the benefits a scheme is obliged to provide should the scheme be wound up. In addition, having sufficient assets to meet the liabilities of the scheme is now also a requirement under EU Directive 2003/41/EC, which my Department implemented in September 2005.

The issues arising from this particular case relate to two Government Departments — the Department of Enterprise, Trade and Employment, which has responsibility for the Insolvency Payments Scheme and which, under the Protection of Employees (Employers' Insolvency) Act 1984, administers the implementation of all of the provisions of the Directive, and my Department, which has responsibility for pension issues and the Social Insurance Fund, from which insolvency payments under the above Insolvency Payments Scheme are made.

Given the similarity in pension systems it is no surprise to note that the UK implemented Article 8 of the Directive in much the same manner as Ireland. A report from the European Commission on 15 June 1995 analysing national laws transposing the Directive found that in the case of Ireland, there was no cause for objection.

In the context of this case Member States were invited by the European Court to submit statements of case or written observations to the Court of Justice by the 25th October 2005. Arising from this invitation, I and my colleague, the Minister for Enterprise, Trade and Employment arranged for the Attorney General to submit observations. The observations were submitted having regard to the potential implications for Ireland of an adverse finding in this case and in order to ensure that the Irish position was fully presented.

An oral hearing in this case was subsequently held on June 1st 2006 at which Ireland was represented by the Chief State Solicitors Office. Following the hearing, the Advocate General delivered her opinion on the 13th July 2006 in advance of the final ruling of the European Court of Justice.

The final ruling was delivered by the European Court of Justice on the 25th January 2007 and my Department has sought the advice of the Office of the Attorney General on the ruling. When this is received discussions will then take place with the Department of Finance, the Department of Enterprise, Trade & Employment and the Pensions Board. It would be premature to consider any possible implications of this ruling in advance of these discussions.