Business

Sunday 22 October 2017

Warning over planned change to pensions

Fianna Fail TD Willie O’Dea
Fianna Fail TD Willie O’Dea
Dearbhail McDonald

Dearbhail McDonald

Planned laws to prevent solvent firms from winding-up defined-benefit schemes without the consent of the Pensions Authority would introduce "substantial obstacles to employers" looking to restructure or wind-up their DB schemes, according to Mercer Ireland.

The pensions specialist also said a Fianna Fail private members bill on pensions would create "a significant change to the occupational pensions landscape in Ireland".

Mercer issued a note last Friday after the Government was defeated by 82 votes to 51.

Under the Pensions (Amendment) (No.2) Bill, solvent companies will be prevented from winding up their DB schemes without the Authority's consent in circumstances where the value of the scheme's assets are less than its liabilities.

The deficit would be treated as a debt owed by the company to the trustees, which must be paid before the scheme can be wound up.

Limerick TD Willie O'Dea, who moved the bill, said the law if passed would not apply in the case of Independent News & Media, which recently moved to reduce DB pensions for existing and former staff members, as any new law cannot apply retrospectively.

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