John Deasy (Waterford, Fine Gael)
Link to this: Individually | In context

Question 164: To ask the Minister for Social and Family Affairs the correspondence she has received from the European Commission regarding possible infringement of Article 8 of Directive 2008/94/EC, as interpreted by the European Court of Justice; and if she will make a statement on the matter. [5526/09]

John Deasy (Waterford, Fine Gael)
Link to this: Individually | In context

Question 172: To ask the Minister for Social and Family Affairs the measures she has put in place regarding measures to protect workers who have lost their pensions and defined benefit security; the minimum level of protection which exist for employees' pensions which are required under the EU insolvency directive; and if she will make a statement on the matter. [5500/09]

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

I propose to take Questions Nos. 164 and 172 together.

The pension rights of scheme members are protected through trust law and by provision in the Pensions Act 1990 as amended. Defined benefit pension schemes are required to comply with the funding standard provision set out in the Pensions Act. This funding standard requires defined benefit pension schemes to maintain sufficient assets to enable them discharge accrued liabilities. 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.

In recognition of the current market difficulties and the difficult decisions that pension schemes will face, the Government has put the following short-term measures in place to ease the pressure on defined benefit schemes: granting additional time for the preparation of funding proposals, as a temporary measure; dealing as flexibly as possible with applications for approval of funding plans; allowing longer periods for recovery plans (i.e., greater than ten years), in appropriate circumstances; allowing the term of a replacement recovery plan to extend beyond the end date of the original plan where the scheme is part-way through a previous recovery plan but is off track due to investment losses; taking into account voluntary employer guarantees in approving recovery plans; ensuring that these extensions are not seen as a weakening of supervision, the recovery plans which fail to demonstrate an appropriate investment approach will be rejected.

The EU insolvency directive 80/987/EEC requires member States to put certain measures in place to protect the pension rights of employees in the event of the insolvency of their employer. In this regard, I should point out that, in its review of the transposition of that Directive, the Commission gave an assurance that Ireland had adequately transposed the provision in that Directive.

The ruling by the European Court of Justice in the Robins case in relation to Article 8 of this directive is being considered in the context of the issues relating to the security of defined benefit schemes. I can confirm that the Department has recently received correspondence from the European Commission in relation to this ruling.

Proposals to address overall security of pensions will be considered as part of the development of a long term framework for pensions which the Government plans to announce shortly.