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

Question 870: To ask the Minister for Social and Family Affairs her proposals to introduce a pension protection fund; and if she will make a statement on the matter. [33319/09]

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

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 trustees must submit a funding proposal to the Pensions Board to restore full funding, normally within three years. However, the Pensions Board can now allow a scheme more than 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. Proposals to address the overall security of pensions are being considered as part of the long-term framework for pensions which the Government will announce shortly.