Clare Daly (Dublin Fingal, Independent)
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80. To ask the Minister for Employment Affairs and Social Protection the role of the Pension Authority with regard to the financial and non-financial assumptions employed for the purposes of the setting of the minimum funding standard for occupational defined benefit schemes; and her views on whether the assumptions used bear no resemblance to reality and this has had a profound negative effect on the continuing demise of occupational defined benefit schemes. [46414/17]

Regina Doherty (Meath East, Fine Gael)
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Section 34 of the Pensions Act 1990 provides the legislative basis for minimum transfer values for defined benefit schemes. It sets out that regulations may prescribe how the transfer payment is to be calculated in accordance with professional guidance issued by the Society of Actuaries or other person, including the Pensions Authority and the Minister for Employment Affairs and Social Protection. The standard transfer value and elements of its basis are used or referenced for a number of items in addition to voluntary transfer payments including the minimum funding standard liability calculations.

Up until 2013, the Society of Actuaries in Ireland Actuarial Standard of Practice PEN-2, Retirement Benefit Schemes Transfer Values, was the professional guidance underlying the calculation and the basis for setting the level of technical provisions required. This guidance was reviewed and updated regularly by the Society of Actuaries in Ireland and changes were subject to ministerial approval. As the standard transfer value basis incorporates assumptions and judgements more appropriate to governmental or regulatory determination there was some concern about the scope of the Society’s role in relation to issues and principles of a public policy nature. It was therefore decided that the regulatory determination of pensions policy aspects would rest more appropriately with the Department and the Pensions Authority with the Society providing technical advice.

In 2014 the Pensions Authority set out in prescribed guidance the pensions policy matters relating to section 34 of the Pensions Act and defined benefit transfer values. This guidance “Prescribed Guidance in Relation to Section 34 of the Pensions Act, 1990” is subject to Ministerial consent and provided for under the . The guidance sets out the assumptions which must be used in calculating a transfer payment on a standard basis and is in addition to the . The guidance sets out financial and non-financial assumptions.

Earlier this year the Pensions Authority submitted a discussion paper to the Department to assist in its consideration of the funding standard for defined benefit schemes with the aim of examining whether there are changes that could be made to the funding standard to make it easier to comply with, but without compromising its role of ensuring adequate advance funding and oversight of over €60 billion of defined benefit obligations. When this review is complete the Department will make recommendations to me for any changes considered appropriate to the funding standard basis.

I hope this clarifies the matter for the Deputy.