Róisín Shortall (Dublin North West, Labour)
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Question 107: To ask the Minister for Social and Family Affairs the reason there is no legal protection for the pension entitlements of a person (details supplied) in County Dublin; the further reason the Pensions Board cannot assist a person in these circumstances as confirmed by them and the Pension Ombudsman cannot help a person in these circumstances as confirmed by that office; and the action she is taking to ensure that pension entitlements of workers of a company are fully secured. [15012/09]

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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Defined benefit (DB) pension schemes such as the scheme to which the Deputy is referring are required to comply with the Funding Standard provisions set out in the Pensions Act. This requires DB pension schemes to maintain sufficient assets to enable them discharge all 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 an agreed timescale (minimum of 3 years).

Where a DB scheme wind-ups on the insolvency of its employer, the order in which the liabilities of the scheme are discharged is also determined by the provisions of the Pensions Act. Simply put, the priority order is as follows:

• Firstly, any benefits secured by members by way of additional voluntary contributions;

• Secondly, future benefits to those scheme members who are already in receipt of a pension or have reached normal retirement age;

• Thirdly, benefits to current employees who are members of the pension scheme and former employees with entitlement to preserved benefits;

• Finally, any subsequent benefits not yet discharged.

The Pensions Act does not impose an obligation on employers of DB schemes to make up any shortfalls that may arise in their pension funds. However, employers have been willing to contribute towards such shortfalls.

My Department, together with the Pensions Board, will continue to monitor the situation in relation to the underfunding of DB schemes. The Pensions Board and the Pensions Ombudsmanâ€TMs office work to ensure that all legal and administrative obligations are carried out by individual schemes, their employers and trustees. They can, and do, pursue such cases where companies renege on these obligations.

As I have previously mentioned, the Government is conscious of the pressures on employers and scheme trustees, arising from the very significant losses incurred by pension funds over the last year and from economic conditions generally. 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 losses. 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.