Joan Burton (Dublin West, Labour)
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Question 925: To ask the Minister for Social and Family Affairs her views on the extent of underfunded company pension schemes in the private sector; if she proposes State intervention to support such pension schemes; and if she will make a statement on the matter. [27980/09]

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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Under the Pensions Act 1990, defined benefit pension (DB) 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.

The Pensions Act, and associated regulations, prescribe that defined benefit schemes are required to assess once every year whether they meet the funding standard. Not all schemes have the same reporting date, but the Pensions Board in its Annual Report for 2008 estimated that approximately 90% of defined benefit schemes did not meet the funding standard.

Where schemes do not satisfy the Funding Standard, the sponsors/trustees must submit a funding proposal to the Pensions Board to restore full funding, normally within three years.

However, as a result of the economic difficulties, the Government introduced a number of temporary measures aimed at easing the pressures being experienced by schemes.

Those measures include-

The granting of extra time for schemes to formulate funding proposals;

Granting flexibility to the Pensions Board to allow longer periods (over 10 years) for recovery plans in appropriate circumstances;

Enabling the Board to allow the term of a replacement recovery plan to extend beyond the end date of the original plan in certain circumstances; and

Enabling the Board to take into account voluntary employer guarantees in approving recovery plans.

It is likely that, as a result of recent improvements in investment markets, the solvency of most schemes has improved. However, the situation is still a cause for concern, and I encourage scheme trustees and sponsoring employers to continue to work with the Pensions Board to address funding issues as a matter of urgency.

Joan Burton (Dublin West, Labour)
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Question 926: To ask the Minister for Social and Family Affairs her views on increasing the standard retirement age in order to enhance long-term fiscal sustainability; and if she will make a statement on the matter. [27966/09]

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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The average exit age from the labour force in Ireland was 64.1 years in 2006, compared to the EU25 average of 61 years. Notwithstanding this, the Green Paper on Pensions, published in October 2007, discussed the issue of raising state pension age as a measure to assist with the sustainability of the public pension system and to strengthen inter-generational solidarity. As was pointed out in the Green Paper, people are now living longer and healthier lives, with the time spent in retirement now much longer than was previously the case. This creates sustainability pressures for both occupational pension schemes as well as state pensions. Other countries have already announced increases in state pension age.

While Ireland currently has a relatively younger population than other countries, it is expected that, by mid century, we will have only two people of working age to every pensioner compared to six people of working age at present. The Green Paper projected that population ageing would give rise to a substantial increase in age-related expenditure, of which pension provision is expected to be the single largest component. Increasing state pension age is one option to help address these spending pressures.

The Government is currently finalising a national pensions framework which will be published before the end of the year. Any decisions on amending state pension age will be made in that context.