Irish companies will be forced to give 12 months’ notice before ceasing contributions to their pension schemes under a proposal published this week by Ireland’s Department of Social Protection.
If a company wants to shut a scheme in deficit, the proposed law would require it to enter into funding negotiations with trustees within the same 12-month period.
The laws form part of the Irish government’s Social Welfare and Pensions Bill 2017, covering reforms of Ireland’s defined benefit (DB) pension rules and its social benefits system.
Fianna Fáil’s Willie O’Dea and the Labour Party’s Willie Penrose have both tabled proposals for similar DB reform in recent months.
Pressure has been building on the government and the regulator, the Pensions Authority, to reform DB rules to stop companies from abandoning their schemes, particularly in light of the high-profile closure of the Independent News & Media pension fund last year.
Announcing the bill, Leo Varadkar, minister for social protection, said: “It is particularly important that the proposals relating to DB pension schemes are brought into effect as soon as possible, and we will strive for a constructive debate in the Oireachtas [Irish parliament].”
The bill includes a rule requiring DB trustees to submit a funding proposal to the Pensions Authority within six months of an actuarial valuation. The Pensions Authority would also have the power to impose a schedule of contributions to fund a deficit if a plan is not submitted or fails to meet the required standard.
Varadkar said he aimed to get the bill enacted by parliament before it takes its summer break from 20 July.
The full draft bill is available here.