Proposed enhanced protections for Ireland’s defined benefit (DB) pension schemes have been removed from a bill put forward to parliament by Ireland’s minister for social protection.
Regina Doherty told Ireland’s parliament, the Dáil, last week that protections included in the bill’s earlier drafts had been removed and would be debated as amendments by the Committee on Social Protection.
“Given the complexities involved, it simply was not possible to have these included in the published bill,” Doherty said upon introducing the Social Welfare, Pensions and Civil Registration Bill 2017.
The protections included measures to force companies to give 12 months’ notice before ceasing contributions to a DB scheme, and a new power for the Pensions Authority to set a contribution schedule if none could be agreed between an employer and trustee board.
Despite Doherty’s assurances that the measures were still on the table, consultancy LCP warned that it meant important protections for DB members could be erased as the bill makes its way through parliament.
“While many companies may welcome the omissions of particular proposals from the bill, the inclusion of these proposals in the original heads followed by their subsequent removal is most unwelcome and leads to uncertainty,” said LCP. “This uncertainty makes it difficult for trustees and companies alike to manage their schemes.”
Although some measures could be reintroduced, LCP added, this was “unlikely” due to parliament’s summer recess, which begins on 22 July.
In her speech last week, Doherty said: “The best outcomes are achieved when trustees, employers and members negotiate to reach agreement on what is needed to secure the scheme’s viability. The amendments I will be tabling on committee stage seek to underpin this approach.”
Ireland’s DB system has been under intense scrutiny in recent years, in particular following the decision by Independent News & Media to walk away from its DB scheme.
In response to Doherty’s introduction of the bill, Labour Party politician Willie Penrose said the current system faced a “significant and worrying crisis” and was in danger of “meltdown”.
Giving the Pensions Authority the power to impose a contribution schedule on employers was “one of the most important amendments” put forward, Penrose said.
As well as discussing the 12-month notice period and the Pensions Authority’s powers, Doherty said the committee would look at provisions for same-sex couples and civil partners to receive a spouse’s pension.