Ireland publishes details of consumer-focused Pensions Council
IRELAND – Ireland's new Pensions Council is to comprise up to 12 members, with four directly representing the country's regulator, central bank and government.
The new council will be formed following a shake-up of Irish pension regulation that will see the Pensions Board renamed and the council charged with devising policy with the consumer "at its heart".
The composition of the council was revealed as the Department of Social Protection (DSP) published the Social Welfare and Pensions (Miscellaneous Provisions) Bill 2013.
Once passed, the Bill will legislate for the rebranding of the Pensions Board to the Pensions Authority and the introduction of the new council.
The Bill will also grant the regulator long-promised powers to direct the winding up of underfunded defined benefit (DB) schemes.
The new authority's significantly smaller Pensions Commission, charged with monitoring adherence to regulation, is to have one representative each from the DSP and Department of Finance, as well as an independent chairman.
The new Pensions Council – which minister for social protection Joan Burton last month said would be tasked with implementing recommendations on a recent report on pension charges criticised by the industry for highlighting the "worst charges possible" – will consist of at least eight members and no more than 12, in addition to a chairman.
The Bill noted that the council would be able to advise Burton "either on its own initiative or at the minister's request", with each member's renewable term running five years.
Of the 12 members, one will act as representative of the new Pensions Authority and the Central Bank of Ireland, respectively, while the Department of Public Expenditure and Reform and the DSP will also each be represented.
The remaining members, appointed by the government, should possess the "relevant skills, specialist knowledge, experience or expertise" to advise the minister.
The DSP did not answer questions at the time of writing whether employer and employee representatives would be granted equal representation on the council, or whether its task was to focus solely on consumer interests.
Nor did the Bill include any provisions to change the priority order for assets on wind-up, an area the industry, employers and unions previously agreed required change. Employer lobby IBEC lamented that a "massive problem" remained unaddressed.
The organisation's director Bredan McGinty noted that retaining the status quo – whereby pensions in payment received absolute priority on scheme wind-up – put the entitlements of thousands of members at risk.
"Many workers now face the prospect of reduced benefits or scheme closures, while pensions paid to existing pensioners will be untouched," he said.
"This is wholly inequitable, especially in a wind-up situation. Thousands of workers could have been helped by a balanced and proportionate shift in government policy, but instead a massive problem remains unaddressed."
LCP partner Martin Haugh last month questioned whether the DSP would be able to legislate for any changes in the wake of a recent European Court of Justice ruling.
The court recently reprimanded Ireland for its failure to protect at least half of accrued benefits within the DB scheme of insolvent manufacturer Waterford Crystal.
A DSP spokeswoman told IPE that the government recognised the need for "a comprehensive policy and legislative response" to the Waterford Crystal case.
"The situation will be kept under review and the minister will report back to government in the coming months on these issues," she said, adding that it had been decided "not to proceed for now" with changes to the wind up order.