IRELAND - The Irish government's tough stance against funding semi-state pension schemes with deficits has softened, as the minister for finance indicated that the government would back the schemes in the event of obligations not being met.
Speaking in the Dail in late April, the minister for finance Brian Cowen said that he “will ensure that the funds concerned are in a position to discharge their obligations”.
Global Pensions first raised the question with Richard Bruton TD, deputy leader and spokesperson for finance for opposition party Fine Gael, who subsequently put the question to the minister during parliamentary question time.
Last month Global Pensions exclusively reported that the Department of Finance is reviewing the possibility of transferring the assets of the non-commercial semi-state schemes to the National Treasury Management Agency for management.
Such schemes potentially include those of the Irish Development Authority, the Shannon Development Authority and Enterprise Ireland.
In the past, the department for finance has always ruled out the possibility of underwriting semi-state schemes in deficit, even in cases of part-privatisation. But the minister’s comments point to the government’s will to see both commercial and non-commercial semi-state pension schemes’ obligations met. Bruton said that he was surprised that the minister had not, as in the past, strenuously denied any government move to fund such schemes.
He said: “It is surprising that he hasn’t reiterated the stand taken on this matter by his predecessor who said that any such move would contravene EU rules. This could indicate a softening of stance and the question that we will have to pursue is what this means for schemes such as Aer Lingus.”
Responding to the question of whether the Department of Finance is looking at transferring the assets of non commercial semi-state pension funds to the National Treasury Management Agency, Cowen said: “As regards the National Pensions Reserve Fund, the deputy will be aware that the relevant statutory provisions governing this fund provide that the purpose of this fund is to ensure that resources are available for the longer term pension needs. The question of any short-term needs in particular pension funds is a separate matter for the organisation and the minister concerned.”
PwC, KPMG, EY and Deloitte must break up their consultancy and audit businesses into distinct firms to provide greater focus on the "most challenging and objective audits", the competition watchdog has said.
The Department for Work and Pensions (DWP) has released its first batch of guidance setting out how the guaranteed minimum pension (GMP) conversion legislation may be used to resolve unequal payments.
This week's top stories include the government spending £800,000 on a Gogglebox advert and MPs writing to The Pensions Regulator about its engagement with the Railways Pension Scheme.