Richard Bruton (Dublin North Central, Fine Gael)
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Question 165: To ask the Minister for Social and Family Affairs the obligations of a company (details supplied) to make up any deficit in the pension fund as they withdraw from their operations here; and if she will make a statement on the matter. [12753/09]

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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Defined benefit (DB) 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 Government is conscious of the pressures on employers sponsoring pension schemes, and scheme trustees, arising from the very significant losses incurred by pension funds over the last year. While 81% of DB pension schemes satisfied the funding standard at the end of 2007, it is estimated that in excess of 90% of DB pension schemes are in deficit at the moment.

As the deputy is aware, in recognition of the current market difficulties and the challenges facing pension trustees, the Government recently announced a number of short-term measures aimed at easing the pressures on many DB schemes. I believe that these measures will assist schemes currently in difficulty and will help to ensure the best outcomes for the scheme members.

However, it must be acknowledged that in the current economic climate, a certain number of companies will cease trading and this may have an impact on their pension schemes. In the case of the company referred to by the Deputy, it is understood that the employees' DB pension scheme is currently in deficit.

Employers who provide DB pension schemes have no legal obligation to make up any shortfalls that arise in their funds. However, many employers have been willing to contribute towards such shortfalls.

It is Government policy to support the continuation of DB schemes where possible. The recent measures announced by the Government will ease the pressure on underfunded schemes by allowing more time to recover recent losses.

My Department, together with the Pensions Board, will continue to monitor the situation in relation to the underfunding of DB schemes. In addition, the Government is currently considering a number of options in relation to the ongoing security of occupational pensions. Any decisions in this regard will be made in the context of the National Pensions Framework which will be finalised shortly.