Remove provisions on defined benefit pensions – Ibec
Ibec, the group that represents Irish business, today appeared before the Oireachtas Joint Committee on Social Protection and called on it to remove flawed provisions on defined benefit pensions from the Social Welfare and Pensions Bill. The hearing was part of the pre-legislative scrutiny process in advance of publication of the detailed provisions of the bill.
Commenting after the meeting, Ibec Director of Policy and Public Affairs, Fergal O’Brien stated: “While we recognise the intention to preserve a sustainable level of retirement savings for those in defined benefit schemes, we believe that the proposed legislation will in fact be counter-productive and could lead to the accelerated closure of such schemes. Employers that have established defined benefit schemes on a voluntary basis to provide retirement income for their employees would be hit with excessive regulation and a retrospective mandatory obligation. This will ultimately penalise employers who have sought to continue to operate defined benefit plans in the most challenging of regulatory and economic environments. This is patently unfair to this group of businesses. Provisions which would put pensions debt on employers constitute a rubicon crossing in pensions policy and will lead to a more rapid decline in defined benefit schemes. This cannot be in the interest of the State or the scheme members.
“The measures would not only impose an extra funding burden on employers, but excessive pension demands could also jeopardise the viability of the businesses involved and the livelihoods of employees. For a certain group of businesses, the provisions could also result in very substantial amounts of pension debt being put on their balance sheets, leading to significant financial and commercial implications. We hope that the Committee members will take on board our concerns and adopt a more sensible approach to supporting employers, trustees and scheme members involved in defined benefit pension schemes.”