Martin Ferris (Kerry North, Sinn Fein)
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Question 74: To ask the Minister for Social Protection if he will take steps to amend section 7 of the Protection of Employees (Employer Insolvency) Act 1984 to ensure that in situations of insolvency involving pension deficits employees will receive at least 50% of their pension entitlements to rectify the current situations in which employees can be left with less than that. [21615/10]

Éamon Ó Cuív (Galway West, Fianna Fail)
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The Protection of Employees (Employer Insolvency) Act 1984 comes under the auspices of the Minister for Enterprise, Trade and Innovation. I understand that Section 7 of this Act provides for the payment, by that Minister, out of the Redundancy and Employers' Insolvency Fund, of the amount of unpaid pension contributions which should have been paid by the relevant employer in respect of a period of not more than 12 months preceding the date of insolvency. Although any questions on this legislation should be tabled to the Minister for Enterprise, Trade and Innovation, I can confirm that the Government has no plans to amend this section of the Act.

As the Deputy knows, some 90% of defined benefit schemes were underfunded at the end of 2008. The vast majority of these continue to work with the Pensions Board to prepare funding proposals aimed at recovering their financial position. Figures for 2009 which indicated an average positive return of 20% for pension schemes suggest that these funding proposals can succeed. Indeed, according to a survey of DB schemes undertaken by the Pensions Board at the end of 2009, the number of schemes failing the funding standard has decreased to 75%. Clearly a lot more needs to be done. However the approach taken by the Board to work with schemes is already showing positive results.

Where schemes are forced to wind-up on the insolvency of their employer, the Government has introduced the Pensions Insolvency Payments scheme (PIPS) which is being administered by the Department of Finance. PIPS provides that qualifying schemes may purchase pension payments from the State at a lower rate than would be available on the open market. In this way, it ensures that more resources from the scheme are available to offset the pension liabilities of active and deferred scheme members.