An amendment to the Social Welfare Bill to prevent solvent companies closing down defined benefit pension schemes was ruled out of order in the Seanad.
Independent Senator Alice Mary Higgins said the amendment was from a well-tested model that operated in the UK. She said she brought it forward with the support of 14 other Senators to deal with the recent decision by Independent News & Media (INM).
“It has been a shocking betrayal of trust in what has been done in relation to Independent News & Media,” she said.
Ms Higgins said there had been a repeated failure to deal with this issue. It had been raised in the 2013 Social Welfare Bill in 2014 by TDs Róisín Shortall and Willie O’Dea. “Again and again the opportunity has been put forward to deal with this issue and the opportunity has not been seized.”
Successive social protection ministers “have always said we will address this through the Pensions Authority and the trustees. What we saw was a massive disrespect for the Pensions Authority and the trustees.”
Big issue
Minister for Social Protection Leo Varadkar said he intended to make pensions a big issue in 2017.
He also said the Cathaoirleach had ruled the amendment out of order. But he said even if it was in order there was a problem in the very first line in it – a solvent firm shall not be allowed to close a defined benefit pension scheme except in a certain circumstance. He said companies did not close down pension schemes.
“They may act in a way that causes them to be closed but it’s the trustees who actually close them,” Mr Varadkar said.
He said it was important not to do something that was well-meaning if it was ineffectual or made things worse.
Increasing the retirement age was a necessary reform. The retirement age in the 1970s was 70 and people used to live to around 74.
“Certainly there should be no mystery why we have an emerging or an extant pension crisis,” he said.
“Pensions were always done on the basis that people would pay into them for 30, 40, 50 years and only need them for a few years. Now we’re in a very different space.”
He said there was a risk “in making a change to the law that works for people who are about to retire in the next couple of years but really pulls the ladder up and empties the pot for people in their 20s, 30s and 40s”.
Any changes that do cost the State have to be borne by someone.
He said it was unhelpful for TDs or Senators to come into the House and demand change without saying how it would be funded.
“Maybe sometimes when you change the rules there are winners and losers,” he said.
