Brian O'Shea (Waterford, Labour)
Link to this: Individually | In context

Question 230: To ask the Minister for Social and Family Affairs the proposals she has to introduce a pensions protection scheme for private sector pensions; and if she will make a statement on the matter. [2586/09]

Brian O'Shea (Waterford, Labour)
Link to this: Individually | In context

Question 231: To ask the Minister for Social and Family Affairs the proposals she has to secure the pensions of all employees of a company (details supplied); and if she will make a statement on the matter. [2588/09]

Mary Hanafin (Dún Laoghaire, Fianna Fail)
Link to this: Individually | In context

I propose to take Questions Nos. 230 and 231 together.

The pension rights of scheme members are protected through trust law and by provision in the Pensions Act 1990 as amended. As supplementary pension schemes are usually established under irrevocable trust, the assets of the scheme are legally separate from the assets of the employer and are not available to any other creditors where the employer becomes insolvent. Under trust law, trustees of occupational pension schemes have the principal responsibility for ensuring that the entitlements of the members are adequately protected and that they receive the pensions due to them.

In addition to the safeguards provided by trust law, the Pensions Act 1990 also provides for the regulation of pensions schemes in Ireland. Under the Pensions Act, defined benefit pension schemes must meet a minimum funding standard which requires that schemes maintain sufficient assets to enable them discharge accrued liabilities in the event of the scheme winding up. Where schemes do not satisfy the Funding Standard, the sponsors/trustees must submit a funding proposal to the Pensions Board to restore full funding within three years. The Pensions Board can allow a scheme up to ten years to meet the standard in certain circumstances.

Should a scheme be wound up by its trustees, the Pensions Act 1990 (as amended) specifies how scheme assets are prioritised. In short, schemes first prioritise benefits that have accrued to members by way of additional voluntary contribution or transfer of rights from another scheme. Benefits being paid to retired members come next in the priority list, followed by benefits to current and deferred members of the scheme.

The Government is currently considering a number of options in relation to the ongoing security of occupational pensions. Any decisions made in this context will be considered as part of the development of a long term framework for pensions. The overall objective is to deliver a pensions system which will provide an adequate income in retirement for everyone, while at the same time being affordable in the immediate and long-term future — a key consideration in the current economic environment.