Pensions Authority will have more powers in winding up schemes, Taoiseach says

More powers are to be given to the Pensions Authority in the winding up of pension schemes, Taoiseach Leo Varadkar has said.

“Trustees are there to look after the interests of the members and not to look after the interests of the employer or, indeed, the employees,’’ he added.

Mr Varadkar said the Social Welfare, Pensions and Civil Registration Bill 2017, which had been introduced in the Dáil by Minister for Social Protection Regina Doherty, would strengthen the authority's powers.

The Taoiseach was replying in the House on Wednesday to Independent TD Clare Daly who said the unique power given to trustees in 2014 legislation meant the pension scheme of thousands of workers in Aer Lingus, the Dublin Airport Authority and the Shannon Airport Authority had changed dramatically from January 2015.

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She said the accrued benefit of active and deferred members had been frozen and would never increase in the future.

“Deferred members saw their entitlements plummeting, devastating the expectations of their living standards in their retirement years,’’ Ms Daly added.

“I can tell the Taoiseach that these people are not celebrating the €5 increase yesterday.’’

Eight years

She said the pension operated for eight years between 2007 and 2014. Workers paid in 2 per cent of their salary, the company paid in 4 per cent and €34 million was put in to kick-start the scheme.

“The expectation was always that members of the fund would get back their contributions and any surplus divided on a fair basis,’’ Ms Daly added.

“Instead, a method of distribution has been unilaterally decided upon by the trustees.’’

An example, said Ms Daly, was that a 45-year-old woman, who paid in €10,500, was being allocated €12,400.

Mr Varadkar said in the case of many occupational schemes amounts paid in by employees and employers were not enough to match promises made.

“This has resulted in reduced benefits for many people,’’ he added.

“It is regrettable, but I do not see any way of resolving it because it would not be fair on those people who do not have an occupational pension to be asked to fill the gap.’’

Ms Daly said there had been a failure on the part of the Department of Social Protection to take on the "unfettered power'' of trustees in pension schemes.

Mr Varadkar said he would be happy to arrange for Ms Daly, Ms Doherty and an official from his department, meet to see if something could be done.

“I suspect there is not,’’ he added.