Written answers

Tuesday, 5 November 2013

Department of Communications, Energy and Natural Resources

Defined Benefit Pension Schemes

Photo of Arthur SpringArthur Spring (Kerry North-West Limerick, Labour)
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617. To ask the Minister for Communications, Energy and Natural Resources if he will provide an update on the ESB pension scheme with particular concern to the €1.8 billion deficit in the scheme; when the status of the scheme changed from defined benefit to defined contribution in the company's annual report; and the action being taken to address the current pension deficit. [46379/13]

Photo of Pat RabbittePat Rabbitte (Dublin South West, Labour)
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In late 2008, the Trustees of the ESB Superannuation Scheme brought forward the tri-annual valuation of the Scheme by one year. That valuation showed an ongoing valuation deficit of €1.9 billion and a Minimum Funding Standard deficit of €1.8 billion. Consequently, the ESB and the ESB Group of Unions formed a working group to assess how best to address the reported deficit and to protect as far as was feasible the interest of ESB and the current members of the Scheme. ESB reached an agreement with staff in 2010 to resolve the pension deficit. Aside from the on-going actuarial position, the Pensions Board also requires the ESB Scheme to assess whether it could meet the Minimum Funding Standard (MFS). This effectively tests whether the Scheme could meet all its current obligations if it were wound up immediately. While neither the Government nor the ESB envisages the winding up of the Scheme, the Scheme is still required to meet the requirements of the MFS. I am informed that the Trustees of the ESB scheme, with the agreement of ESB, submitted a funding plan to the Pensions Board, which was approved in October 2012. I am advised that the ESB plan aims to eliminate the deficit by 2018 and that this plan remains on track. Regarding the manner in which ESB accounts for the Scheme in its financial statements, my Department has been advised by the ESB that, having taken expert legal and financial advice, the Company is satisfied that the current accounting treatment for the Scheme is correct and in accordance with applicable laws and international accounting standards.

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