Global menu

Our global pages

Close

The Pensions (Amendment) (No.2) Bill 2017 has passed its first stage in the Dáil

  • Ireland
  • General

10-02-2017

The Pensions (Amendment) (No.2) Bill 2017 (the “Bill”) passed its first stage in the Dáil yesterday, 9 February. The Bill will now go to the Select Committee on Social Protection for their consideration.

The stated purpose of the Bill is “to provide for an appeals mechanism where a pension scheme is being wound up by the trustees of that scheme”. Section 2 of the Bill goes on to state that where trustees of a defined benefit scheme have made a decision under the Trust Deed and Rules to wind up, cease or return the benefits accruing under a scheme, the members (by majority) may appeal the decision to the Pensions Authority. This appears to potentially cover an accrual freeze under a scheme as well as a wind up. The right of appeal arises where “it is believed that” the restructuring may result in a category of the members being treated inequitably.

The Section goes on to provide that the Minister may regulate to provide the Pensions Authority with the necessary “legislative” provisions to prevent such inequitable treatment. The Minister clearly does not have authority to do this.

Section 3 of the Bill proposes to introduce a provision to the Pensions Act which will make it “illegal for a solvent company to wind up its defined benefit pension scheme” unless it obtains consent from the Pensions Authority, when the value of the assets of the scheme is less than the amount of the liabilities of the scheme. Consent is to be withheld until an amount equal to the difference is paid to the trustees. The methodology for calculating the scheme’s assets and its liabilities is not defined.

There is a saver where such a payment would present a serious risk to the solvency of the employer. The wording of this Section again presents significant issues of interpretation.

It remains to be seen how the Bill will fare at Select Committee stage but it has potentially wide ranging implications.

Disclaimer

This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full terms and conditions on our website.

< Go back

Print Friendly and PDF
Register to receive regular updates via email.