December 25 2013 - Christmas Day

SOCIAL WELFARE AND PENSIONS

(No. 2) ACT 2013 (ACT No. 49 of 2013) -

SIGNED INTO LAW BY

THE PRESIDENT OF IRELAND

THIS ACT PROVIDES FOR YOUR PENSION TO BE REDUCED IF SCHEME RESTRUCTURED*

THIS WILL IMPACT A SIGNIFICANT NUMBER* OF

IASS PENSIONERS

[*estimated 3000+ pensioners will see pensions lower each month]

THIS COULD REDUCE COMBINED PENSION PAYMENTS OF IASS PENSIONERS BY UP TO €7M PER ANNUM.

In order to make more funds available for active and deferred pensioners the Minister for Social Protection introduced legislation to the Oireachtas in November 26 2013 to permit trustees to reduce your current pension in payment.

The IASS pension scheme was mentioned extensively during the Seanad, Dail and Dail Sub-Committee debates. Amendments were put forward by the opposition parties dealing with all the issues presented by RASA and individual members of RASA. All these amendments failed. Despite strong representation the Minister did not introduce a requirement for employers to top up pension schemes in minimum funding standard deficit where employers are solvent.

During these debates detailed discussions took place on the different situations covered under the legislation including the situation where the employers are solvent but the pension scheme is insolvent (i.e. single insolvency) and restructuring which is the situation being proposed for IASS and double insolvency.

The legislation provides for no adjustment for pensions up to €12,000; a 10% reduction on all of pensions income if earn above the €12000 (with a minimum €12k) up to €60,000 and 20% for pensions exceeding €60,000 (with a minimum of €54k). Other provisions under Restructuring are also provided for and detailed guidance notes are expected to be issued by the Pensions Regulator in January 2014.

Based on examples on official websites following the change in priority order, the reduction applied to the average IASS pension of €20,000 per annum of 10% reduction would be €2,000. * Go to Pensions Authority [formerly Board] Website 9th January 2014: Social Welfare and Pensions (No. 2) Act 2013 - Information No Note Page 2, and second example in box. www.pensionsauthority.ie

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These reductions will go towards funding the Minimum Funding Standard Actuarial Debt and improving the situation for active and deferred pensioners. This is a debt we did not know we were carrying

Under Minimum Funding Standard calculation RASA understands that this changed legislation to reduce IASS pensioners' payments could provide an estimated additional €110m euros asset transfer from pensioners to cover actives and deferreds liability.

Legislation provides for all pensioners to be told/notified in advance of any application to the Pensions Board to restructure scheme benefits. In these circumstances a pensioner will have at least one month to make a submission to the Trustee of the scheme in relation to such a proposal.

Since the enactment of this legislation to reduce our pensions in payment RASA has expressed numerous concerns in writing to both the Trustees and Pension Board in relation to the ramifications of this legislation.

Pensioners are still awaiting individual responses to these concerns

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The Irish Congress of Trade Unions, Employers and the pension industry have succeeded in making sure that pensioners contribute to the Defined Benefit scheme deficit without pensioners being represented at the table. This 'sharing of the pain' call to reduce pensioners occupational pension [with no 'gainsharing'] came in a unprecedented step when the Irish Congress of Trade Unions, who represent current employees, along with the employers organisation IBEC, the Society of Actuaries of Ireland and the Irish Association of Pension Funds jointly campaigned for a change to the priority order.

None of these organisations represent the interests of those on pensions.

These organisations were stating that those in receipt of pension are not being asked to give up anything while the President of the Society of Actuaries stated in his Presidental Address [Sept 2013] that...elders will make off with the assets before they[younger] members retire ..and in December 2013 following the enactment of the legislation stated that ....they would have liked to see the changes go further...

Over the years RASA has had extensive communications with Ministers, Senators, TD's, Pension Regulator and employers on behalf of RASA members on all of these issues. Immediately following the publication of the Bill in November 2013 RASA has had extensive contact with Ministers and public representatives and encouraged members to do the same. RASA called on all members to make sure their voices are heard before legislation is passed by contacting Senators, TD's, Ministers and others.

In 2013 new powers were given to the Pensions Board to wind-up a pension scheme in circumstances where a scheme is underfunded and the trustees and employer are not in a position to adopt a funding proposal. During these debates reference was made to a 2013 European Union judgement in relation to Waterford Crystal. This case involved the protection of employees in the event of the insolvency of their employer in relation to their occupation pensions -Case C-398/11 - Judgement of the Court (Third Chamber) 25 April 2013 -Thomas Hogan & others v Min for Social & Family Affairs, Ireland & AG.

Transcripts/Playback of the Parliamentary debates can be read/viewed on Oireachtas website, or individual TD websites - see links below

http://www.kildarestreet.com/

Social Welfare and Pensions (No. 2)...: 26 Nov

Social Welfare and Pensions (No. 2)...: 28 Nov

Dail Debates Dec 5th 2013

Dail SubCommittee Debate December 12 2013

Dail Wednesday December 18th 2013 - Report & Final Stages

Bill passed the Final Stages on December 18th 2013.

Signed into legislation by the President on Christmas Day, December 25 2013

Written Replies to Dail Questions on Social Welfare & Pensions (No 2)Act:

Q125 Ref No 3527/14 - Jan 28 2014 - Guidance Notes

Q96 Ref No 5870/14 - Feb 5 2014 - Guidance Notes

Q 57 Ref No 1968/14 - Access to States Labour Relations Machinery to Former employees on pension issues

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