Ireland keeping 'open mind' on wind-up order for pension funds
IRELAND - Ireland's Department of Social Protection has denied that six proposals put to stakeholders on changes to the country's wind-up order of defined benefit (DB) pensions - criticised by unions for not addressing "fundamental issues" - form a definitive list of ideas.
The department declined IPE's request to publish details of the review currently being conducted by consultancy Mercer, arguing that it would be inappropriate as long as the process was ongoing.
Discussing a recent consultation meeting with select stakeholders - understood to have consisted of 6-8 representatives of the pensions industry, including the Irish Association of Pension Funds - a spokeswoman for the department said: "A paper was circulated to a representative group of stakeholders for discussion on this complex and sensitive issue."
She added: "The paper outlines a range of possible alternative approaches on how the assets of a scheme might be distributed. This was not a definitive list, and stakeholders were invited to suggest alternative approaches or variations on those proposed in the paper. Stakeholders have since submitted proposals, and these are being considered at present."
The statement comes after last week's letter from the ESB Group of Unions in which union secretary Brendan Ogle outlined how the energy company's main pension fund would seek to wind up in the unlikely event that it was forced to do so.
Ogle suggested the superannuation fund impose a cap on pensionable pay and at first seek to offer all members - actives and pensioners - a minimum payment in line with the state pension.
At present, the wind-up order bestows absolute priority on pensions in payment, regardless of cost.
As a result, the submission estimated that actives would be left with only 4% of accrued benefits.
Ogle told IPE that all six options proposed in the closed-door consultation were "a variation of the same" - with a percentage of pensions in payments met before the benefits of actives were considered.
However, the union secretary was critical of the lack of cap on pensionable pay.
Of the six proposals, one of which was to leave the wind-up order untouched, he said: "None of the options addresses to us the fundamental issues that we try to address."