The Social Welfare, Pensions and Civil Registration Bill 2017 (the “Pensions Bill”) as presented to the Dáil on 5 July 2017 appears to intend more modest pension reforms than was initially anticipated. More far-reaching reform proposals may re-emerge as the Bill progresses.
The General Scheme of the Social Welfare and Pensions Bill 2017 was published in May by the former Minister for Social Protection, Leo Varadkar which included extensive proposals for defined benefit pension schemes (the General Scheme of the Bill). In short, those proposals had sought to introduce (1) a minimum statutory notice period of 12 months for winding up defined benefit pension schemes and (2) a possible employer debt provision. These two key proposals have now been dropped from the Pensions Bill as initiated in the Dáil.
Instead the provisions in the Pensions Bill will include a number of timing changes for defined benefit pension schemes:
- a new 6 month time limit for the submission of a funding proposal where a scheme does not meet the minimum funding standard (a proposal retained from the General Scheme of the Bill);
- 6 months (instead of 9 months) for a funding standard reserve certificate to be submitted where a scheme does not meet the funding standard reserve; and
- an annual (rather than triennial) requirement for a scheme which ceases to be a regulatory own funds scheme to submit an actuarial funding certificate.
The changes to timings (in particular the new timeframe for submission of a funding proposal) seek to create an impetus for negotiation between employers and trustees.
Comment
The new Minister for Employment and Social Protection, Regina Doherty mentioned in a statement to the Dáil on 14 July last that she intends to put forward amendments at Committee Stage to re-introduce the 12 month mandatory notification period and a debt on the employer provision. The Pensions Bill progresses to second stage which will take place in the autumn, as the Dáil is now adjourned until September.
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