Mary Mitchell O'Connor (Dún Laoghaire, Fine Gael)
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167. To ask the Minister for Social Protection if consideration has been given to re-evaluating the defined benefit pension schemes to increase compliance, when only 49% of defined benefit pension schemes are in compliance; and if she will make a statement on the matter. [20123/15]

Joan Burton (Dublin West, Labour)
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I am very aware of the funding difficulties which have been encountered by the employers and the trustees of defined benefit pension schemes in recent years.

The Pensions Act requires the trustees of a pension scheme to maintain sufficient assets to meet the liabilities of the pension scheme in the event of its wind-up. The trustees are required to report the funding position of a scheme to the Pensions Authority on a regular basis. If a scheme fails to meet the funding requirement, the trustees are required to submit a funding proposal to the Pensions Authority setting out how it is proposed to restore scheme funding.

This funding requirement was suspended following the downturn in financial markets in 2008. In the meantime, a number of both administrative and legislative measures were introduced to support employers and trustees of pension schemes in responding to the funding challenge. Following a review of the defined benefit pension model, I introduced legislation in 2012 which required the trustees of pension schemes to maintain an additional level of funding in the form of a ‘risk reserve’ to protect the pension entitlements of scheme members against future volatility in financial markets. Pension schemes are required to have this level of funding in place by 2023. Following this change to legislation in 2012, the funding requirements set out in the Pension Act were re-introduced.

The Pensions Authority is working with the trustees of pension schemes to achieve sustainable pension provision. At the end of 2014, 60% of defined benefit pension schemes were in compliance with the funding requirements set out in the Pensions Act. All except for 30 schemes of the remainder have agreed funding proposals. The Pensions Authority is in intensive dialogue with the trustees of these outstanding scheme.