Social Welfare, Pensions and Civil Registration Bill 2017 In our last Update we advised you that the Social Welfare, Pensions and Civil Registration Bill 2017 had been published and the main amendments to the Pensions Act that had been proposed in the original Heads of Bill had been removed. Our understanding was that the intention was to reintroduce these provisions at Committee Stage and that they were removed for technical drafting reasons. This was confirmed by the Minister for Employment and Social Protection, Regina Doherty T.D., in the Dáil on Friday when the Bill received a Second Hearing. The Minister said:

“The Bill before us today is, in a sense, a work in progress. Many Members present will be keenly aware of the issues affecting the defined benefit pensions sector in Ireland in recent times. I will be introducing amendments to the Bill on Committee Stage in this area. Given the complexities involved, it simply was not possible to have these included in the published Bill. While we will have an opportunity to consider the amendments in greater detail, the fundamental point I want to make now is that the key purpose of the amendments is to better protect the benefits of scheme members.

"Until now, there has never been a statutory obligation on employers under Irish law to engage with trustees and members to address proactively deficits in their defined benefit schemes, nor have conditions been put on employers, who wish to terminate their liability, to contribute to their defined benefit schemes. That will no longer be the case.

"As Members know, defined benefit schemes have been facing substantial challenges over the past two decades. To put it simply, the cost of providing benefits has increased at a rate that has not been covered by the investment returns earned by pension schemes. I acknowledge that many employers and scheme trustees have made great efforts to ensure the ongoing viability of their schemes. 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.

"The amendments will not permit an employer to walk away at short notice. They will provide for a 12-month notification period to enable negotiation and discussion between all sides. Where a scheme is in deficit, it will require the employer to enter into dialogue with the trustees to develop a plan to sustain the scheme. It is only where these steps have failed and no funding proposal is in place that the Pensions Authority will determine a funding obligation in the form of a schedule of contribution amounts and dates by which those amounts have to be paid. These measures will encourage employers to engage with trustees and members to ensure schemes are well funded and managed. I should mention also that the provisions will allow for entitlement, in certain circumstances, to a spouse’s pension for civil partners and same-sex spouses who are members of occupational pension schemes.”

As the Dáil has now adjourned until September it is clear that the Bill will not pass for some time.

Citizen’s Assembly

The most recent meetings of the Citizen’s Assembly considered how we best respond to challenges and opportunities of an ageing population. Details of the proceedings can be accessed here.  A number of recommendations were made including:

• That the Government should introduce some form of mandatory pension scheme to supplement the State pension
• The removal of the anomaly, which arises when a person who must retire at 65 is not entitled to the State pension until 66
• Abolishing mandatory retirement based on age
• Benchmarking the State pension by reference to average earnings
• That the Government should take steps to rationalise private pension schemes to include greater transparency in relation to fees.  

A report will now be prepared by the Assembly and sent to the Government in September.