Fianna Fáil Spokesperson on Social Protection, Willie O’Dea TD, has launched the Pensions (Amendment) Bill 2013, which aims to address the crisis over insolvent Defined Benefit Pension Schemes.
The Bill aims to tackle the inequality with the current priority order for pensions, which the Government failed to deal with in the Social Welfare and Pensions Bill.
Deputy O’Dea commented: “The Government’s Social Welfare and Pensions Bill leaves thousands of workers in danger of losing their pension rights. My Bill aims to rectify this.
“The Government’s Bill has failed to change the priority order which applies when Defined Benefit Pension Schemes shut down. The current rules give absolute priority to existing pensions. This means that when a pension scheme winds up with insuffuicient funds, members who have not yet reached retirement age may only receive a small fraction of their expected entitlements.
“Indeed, some pension holders may be left with nothing; for example, the current rules mean that retired former senior executives will have their full pension of €100,000 or €150,000 protected in a windup whereas a 64 year old worker months away from retirement may be left with no pension rights at all. Fianna Fáil believes that a fairer process would be to continue to prioritise existing pensions but only up to a level of €30,000 or 50% of expected benefits, whichever is the lowest.
“The Government should also move to prevent solvent firms walking away from Defined Benefit Pension Schemes that are in deficit. Fianna Fáil proposes that a solvent firm will not be allowed to close a scheme that has reached a minimum 90% funding standard.
“Minister Joan Burton has twice promised to rectify this and twice she has failed. She has done this in the knowledge that it is absolutely critical that changes are made before June 30th this year. This date is vitally important because of new rules introduced by this Government which are due to come into effect and will result in a large number of Defined Benefit Pension Schemes being wound-up.
“The Government claims that it cannot act in light of the recent ECJ verdict in the Waterford Crystal case but Fianna Fáil believes that comprehensive policy and legislative responses that address these issues is needed.
“By putting off this reform, the Minister is confining tens of thousands of workers to potential penury.”