Pensions scheme operations are a matter for the trustees of the particular scheme, Taoiseach Enda Kenny said when he was challenged about the Government’s protections for pensioners when schemes are closed down “on a whim”.
Mr Kenny acknowledged “there is no legislation governing this in respect of Ireland”.
Fianna Fáil social protection spokesman Willie O’Dea said there was an implied recognition in the programme for government that the pension problem needed to be dealt with.
He asked Mr Kenny if he considered it acceptable that a “solvent profitable company can change and close down a defined benefit pension scheme on a whim to the detriment of its pensioners and deferred pensioners and there is no provision in Irish law to deal with it”.
The Taoiseach said “there are two defined benefit pensions in respect of the case you are probably referring to”, in apparent reference to the controversy following the decision by Independent News & Media to unilaterally close its pension scheme, which was backed on Monday at a meeting of the media group’s shareholders.
Mr O’Dea said he was “not referring to any particular case”.
Mr Kenny referred to the situation in Britain where he said defined benefit was based on levies and was only used when a company involved became insolvent.
Wrong
But Social Democrats TD Catherine Murphy said the Taoiseach was wrong about the situation in the UK.
“In the UK a solvent company cannot walk away from a defined benefit pension scheme.”
She asked the Taoiseach if he accepted there was a gap in the law. “Independent News & Media has had the benefit of having more than €130 million written off by AIB and Bank of Ireland”.
People who had deferred their pensions “are being left very exposed due to the gap in the law. The matter is urgent. Other companies are doing exactly the same. Does the Taoiseach not see there is an urgent need for legislation to address the gap in the law?”
Mr Kenny repeated that in the UK the pension protection fund came into use only when a company was insolvent.
He said figures from the Pensions Authority showed that more than 60 per cent of defined benefit schemes met the required standards and the remainder had recovery plans. Mr Kenny added, however, that there was considerable concern there would be “significant deterioration” in the coming months.
“The operation of a pension scheme is in the first instance a matter for the trustees of the particular scheme. The Minister recently met the chairperson of the Pensions Authority.
“He has asked the authority to report back to him with an assessment of the current overall position on defined benefit schemes. He will report to the House when it comes back to him.”
