IRELAND – Government and opposition parties in Ireland’s Dáil have sought assign blame to each other over the “blatant injustice” facing pension fund members over the distribution of assets upon scheme wind-up.
In a parliamentary debate earlier this week, Fianna Fáil social protection spokesman Willie O’Dea said that many defined benefit pension trustees had not submitted funding proposals to the Pensions Board by the end of last month, as they had “no hope” of meeting the “onerous” funding requirements demanded by the reinstated minimum funding standard.
The debate came as employer group IBEC, union umbrella group ICTU, and the Irish actuarial and pensions associations issued a joint statement condemning the government’s inaction in addressing the priority order, arguing that their cooperation on a statement should underline the “seriousness” of the situation.
O’Dea went on to say that the resulting scheme wind-ups would see active and deferred members have their benefits cut, as under the current priority order pensions in payment receive absolute priority.
Referring to minister for social protection Joan Burton, he said: “The minister promised on a number of occasions to change the order of priority.”
He added that the 30 June deadline for submitting funding proposals had now lapsed and that Burton had done this knowing that schemes closing would then be required to distribute their assets in the existing “unfair” manner.
Citing commitments in the government’s coalition agreement to amend the order, as well as repeated assurances to employer and union representatives, O’Dea asked: “What is the reason for this paralysis?
“Is she going to do something, even at this late stage, to alleviate the problem these people face?”
Clare Daly, a TD for the Socialist Party, added that the “cat is clearly out of the bag” and the country was now facing an “open crisis”.
Speaking on behalf of the government in Burton’s absence, minister for justice and equality Alan Shatter sought to assign blame to Fianna Fáil, who had formed the government prior to Ireland’s bailout by the IMF.
Responding to comments from O’Dea that actives and deferreds were “unlucky” to not yet count as retirees, thus safeguarding pension payments, he said: “Deputy, they are the casualties of the complete mess your party made of this country over 14 years.
“They are the casualties of the Fianna Fáil Party’s failure to put in place a regulatory regime that ensured defined benefit schemes were properly maintained.”
He added that it was “unfair” to allege that the government had not acted on pensions reform, referencing powers recently granted to the Pensions Board allowing it to instigate a scheme wind-up where it deemed necessary, as well as the planned introduction of a risk reserve for DB funds.
“Let no one pretend this is an easy problem to resolve,” Shatter concluded.
“Deputy O’Dea and others in Fianna Fáil should stop washing their hands of their responsibility as individuals for the problems this Government is now seeking to address.”