John Perry (Sligo-North Leitrim, Fine Gael)
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Question 32: To ask the Tánaiste and Minister for Enterprise, Trade and Employment the deficit in the FÁS pension fund; and if she will make a statement on the matter. [40964/09]

Mary Coughlan (Donegal South West, Fianna Fail)
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The valuation figures for the FÁS Closed Superannuation Scheme, which solely covers former AnCO staff, as at 31 December 2008 are the following:

the market value of pension fund assets is €328 million;

the present value of pension liabilities is €631million. This leaves a deficit in the FÁS pension fund of €303 million.

The valuation has been prepared by a qualified independent actuary under accounting standard FRS17. This standard was issued by the Accounting Standards Board in November 2000. The standard deals with the treatment of pensions and other retirement benefits in company accounts. Its principal focus is to make reported accounts for pensions more transparent to ensure greater consistency between entities in the way pension costs are disclosed. It effectively provides a snapshot of assets at current value and the present value of liabilities into the future based on actuarial assumptions e.g. annuity rates, inflation, mortality rates, etc.

The current deficit in the fund reflects the collapse in equity values over 2008 and the early part of 2009, which has led to a significant fall in the total market value of pension scheme assets. While the present value of funded pension liabilities has also dropped over the same period, it has done so to a lesser extent. The asset figures have improved in the interim but remain subject to market fluctuations.

In April 2008 following consideration by the Government of a proposal that the assets of the funds and the liabilities of a number of State pension schemes be taken over by the State, the Government decided in principle to:

authorise the Department of Finance to enter into discussion with the trustees and administrators of the respective Pension Funds with a view to winding up the funds;

have the NPRF take over the assets of the Pension Funds and

have the liabilities of the schemes taken over by the State and

once the transfer of the assets was effected, the schemes would be operated on a pay-as-you-go basis.

The Pension Funds in question included several non-commercial State bodies schemes under the aegis of my Department: FÁS, SFADCO, IDA and the National Goods Council. The FÁS Closed Superannuation Scheme provides benefits for pensionable staff of FÁS who were former AnCO staff.

Following the consultation with the trustees and administrators of the schemes concerned, legislation was prepared in order to enable the transfer of the assets and liabilities of the pension funds. The necessary powers were included in the Financial Measures (Miscellaneous Provisions) Act, 2009. A transfer order must be made under the Act to give effect to the transfer of each fund.

In preparation for the transfer of assets from the FÁS superannuation fund to the National Pension Reserve Fund, the superannuation scheme, which was set up under Statutory Instrument 515 of 1998, has recently been amended by Statutory Instrument 414 of 2009. Provisions in respect of the Closed Spouses' and Children's Contributory Pension Scheme are set out in Statutory Instrument 420 of 2009.