Clare Daly (Dublin Fingal, Independent)
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69. To ask the Minister for Social Protection his views regarding the future viability of defined benefit schemes here in view of the planned closure of a defined benefit pension scheme (details supplied); his plans to address the crisis in this sector; and if he will make a statement on the matter. [2600/17]

Clare Daly (Dublin Fingal, Independent)
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76. To ask the Minister for Social Protection the steps he plans to take to prevent solvent and profitable companies from closing their defined benefit pension schemes and moving pension risk to employees which is a growing issue in pension schemes across different employments here. [2601/17]

Leo Varadkar (Dublin West, Fine Gael)
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I propose to take Questions Nos. 69 and 76 together.

While it is not appropriate for me to comment on matters relating to an individual pension scheme, the Deputy will be aware that the number of defined benefit (DB) pension schemes in Ireland has dropped significantly in the last two decades. During the financial crisis the decline of defined benefit pension schemes accelerated. Occupational pension schemes are generally set up under trust and are contributed to by the employer on a voluntary basis. Almost all Irish defined benefit schemes have a rule that allows the employer to cease contributions, usually after a notice period. Neither the Minister for Social Protection nor the Pensions Authority has the power under legislation to intervene to freeze the winding up of a scheme or to compel the employer to make contributions to a scheme. Neither is there an obligation on the employer to give notice to members or to consult in advance of ceasing contributions. However, in the case where a restructuring of benefits is proposed, pensioners, deferred scheme members and unions must be kept informed by trustees. Furthermore, changes made in 2015 require trustees to notify groups representing the interests of pensioners and deferred scheme members in a scheme in such a situation.

While there are strong arguments for the introduction of greater employer obligations, it is also the case that certain less desirable side effects may result. Any changes to the Pensions Act that legislatively alters the relationship between a pension scheme and its sponsoring employer could have far-reaching implications for pensioners and the pension sector as a whole, as well as the employers. These could include prompting well-funded schemes to wind up to avoid new obligations; threatening a company’s financial stability; rendering some employers insolvent; and/or giving a competitive advantage to employers who either never provided a pension and/or put defined contribution schemes in place.

My Department and the Pensions Authority are currently working on proposals for the reform and simplification of pensions, the purpose of which is to impose higher standards on all occupational schemes.

I would like to assure the Deputy that my Department and the Pensions Authority are closely monitoring developments in the DB sector and keep the need for legislative change under continuous review.

I hope this clarifies the matter for the Deputy.