Róisín Shortall (Dublin North West, Labour)
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Question 142: To ask the Minister for Finance the estimated cost to the Exchequer of extending the terms and conditions of the pension insolvency payment scheme to insolvent pension schemes where the company is solvent; his reason for not doing so thus far; if this proposal is under active consideration in his Department. [22221/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The basis for the Pensions Insolvency Payment Scheme (PIPS) is set out in the Social Welfare and Pensions Act 2009. The principal qualifying conditions are that the sponsoring employer must be insolvent (in accordance with the definition used in the Protection of Employers (Employers' Insolvency) Act 1984) and that the defined benefit pension scheme must be winding up in deficit – the "double lock" criterion of pension scheme and employer insolvency. The Act also requires that the PIPS scheme be operated on a cost-neutral basis for the Exchequer.

Under PIPS, trustees of a participating pension scheme must pay to the Minister a lump sum which equals the net present value of the future stream of PIPS payments for the lives of the pensioners concerned and the associated administration costs. The sum will be calculated by the National Treasury Management Agency on an actuarially cost-neutral basis. The PIPS is therefore a special measure intended to apply in carefully defined circumstances as an option of last resort where no further source of support is open to a pension scheme because of the double insolvency. PIPS was restricted to pension schemes of insolvent employers as to do otherwise would run the legal risk of breaching State aid and competition rules. The scheme is running on a pilot basis for 3 years and will be reviewed in 2013.