Pensions Bill draws warning note

The former UK Pensions Ombudsman has warned that forthcoming Irish pensions legislation contains serious flaws that could undermine its success.

Dr Julian Farrand, who retired from his ombudsman role in August, said yesterday that provisions in the Pensions (Amendment) Bill, 2001 which relate to the creation of the Republic's first Pensions Ombudsman contain holes.

He said that unless the provisions in question were tightened before the legislation's enactment, the effective operation of the new ombudsman's office could be compromised. Primary among Dr Farrand's concerns is a doubt over the independence of the ombudsman. Based on his own experience in the UK, he said a provision in the Bill which stated the Minister for Social, Community and Family Affairs could remove the ombudsman from office at any time if this seemed "necessary" could leave the office open to unnecessary interference and thus restrict its independence.

He also suggested the legislation should allow the ombudsman to delegate his responsibilities. This would, he said, avoid interruptions caused by holidays or other breaks and thus lead to the smoother operation of the new office.

From a complainant's point of view, Dr Farrand highlighted the Bill's restrictions on the amount of redress that could be made if a complaint succeeded.

The Bill limits this to "actual loss of benefit" and does not cover any loss in respect of a scheme's surplus, for example. Dr Farrand said his experience in the UK had shown him that such a system could be unfair in practice.

The former ombudsman also urged draftsmen to look at clarifying the extent of the new ombudsman's jurisdiction and ensuring that decisions made by the office would be "final and binding". Dr Farrand was participating in a conference hosted by the Association of Pension Lawyers in Ireland.

The conference had earlier been addressed by the Minister for Social, Community and Family Affairs, Mr Dermot Ahern, who told the gathering that a consultation process had been conducted with a view to introducing amendments to the Bill at Committee Stage.

The Minister reiterated his intention to have the Pensions Bill enacted "as early as possible in 2002".