The Social welfare and
Pensions (Miscellaneous Provisions) Bill 2013 was announced by the Minister for
Social Protection, Joan Burton TD on 22nd May 2013. The main pension provisions of the Bill were:
§ The
Pensions Board will change its name to Pensions Authority and its governance is
to change. The Pensions Authority will
consist of an independent chairperson appointed by the Minister for Social
Protection and 2 ordinary members, one nominated by the Minister for Social
Protection and a representative of the Minister for Finance.
§ A
new Pensions Council will be established.
The Pensions Council will have a purely advisory function. The Pensions Council will consist of:
v A
chairperson;
v A
representative of the Minister for Social Protection;
v The
Pensions Regulator;
v A
representative of the Central Bank;
v A
representative of the Department for Public Expenditure and reform; and
v Up
to 8 other members who the Minister for Social Protection considers to have the
relevant skills, specialist knowledge, experience or expertise to enable them
to carry out their functions under the Pensions Act.
§ The
name of the chief executive of the Pensions Board will be changed to the
Pensions Regulator and s/he will be a member of the Pensions Council.
§ The
Pensions Board will be given the power to wind up a pension scheme where the
scheme is underfunded and the trustees and employer are not in a position to
adopt a funding proposal, and where the trustees of the scheme fail to comply
with a section 50 direction to restructure scheme benefits.
§ The
introduction of a provision for an appeal to the High Court on a point of law
following such a direction from the Pensions Board, or following a direction
from the Pensions Board regarding a Section 50 order to reduce benefits “made other than on application by the
trustees”.
While the above changes
to the governance and oversight of pensions are largely welcomed, what is
disappointing is that the Bill does not include the much promised proposed
reform to the priority order rule, i.e. the order in which assets are
distributed when a defined benefit pension scheme is in wind-up. With a deadline of 30 June 2013 for the
submission of funding proposals, for many schemes the decision not to address
this issue in this Bill would seem to be a missed opportunity to reinstate some
fairness between members of defined benefit schemes.
The reason given by the
Minister for not dealing with this issue is the recent Waterford Crystal case
in which the EU ruled that the Irish government had failed to implement the EU
Directive requiring governments to provide protection for scheme members where
the employer was insolvent. While it is
of some relevance, the feeling is that this is just an excuse for the Minister
failing to grasp the nettle of pension reform.
Independent Trustee Company are delighted to once again support the
YIBA annual charity event for the fourth consecutive year. The charity of
choice for 2013 is St. Vincent de Paul.
