Blatant mismanagement of many defined-benefit pension schemes is under way on a vast scale at the expense of citizens and pensioners, Independents4Change TD Clare Daly said as she called for an inquiry.
She asked what action the Government would take "to examine the cabal at the top of the pensions industry" and under Dáil privilege named industry leaders IPT, Mercer and Irish Life.
Ms Daly said the mismanagement was not just in the companies she named “but in many more at the expense of citizens and pensioners”.
“The same names appear across all of the trustees and across the industry. There needs to be an inquiry into this.”
The Dublin Fingal TD highlighted a number of pension shutdowns including, last week, by Independent News & Media. Ms Daly said the company “unilaterally closed the defined-benefit scheme on the back of a €23 million shortfall, despite the fact that this was the company that got a €140 million bailout from the taxpayer.”
It was “the latest solvent employer to shut down a pension scheme because it does not want to foot the bill”.
She said the Central Remedial Clinic had unilaterally shut its pension scheme with a €2 million deficit and the same amount would be paid from the workers' pension pot "to Mercers and all the other advisers involved in that scheme. This is because the Government put wind-up costs higher than members' benefits."
Pension managers
Hitting out at pension managers, she said: “The same professional experts who play all sides of the house, advising the trustees and acting as actuaries, will now get money from a wind-up, money from bringing people into a new defined-contribution scheme and money from administering those schemes”.
Aer Lingus has a supplementary pension scheme where €200 million has sat in cash for two years. "A decision was made to close it but it has not been wound up", but beneficiaries are being denied access to it. "Meanwhile the trustees, advisers, administrators and the management fees are all feeding off the pot, which is getting smaller and smaller."
Calling on the Government to examine the “cabal at the top of the pensions industry” Ms Daly said “the same organisations, IPT, Mercers and Irish Life, appear on all sides of the fence in this arrangement while pensioners’ living standards are being utterly decimated and the Government sits on its hands”.
Ms Daly said she had raised the issue with Minister for Social Protection Leo Varadkar, who referred her to an official from the pensions section of the department. He “came back eventually and said: ‘Yeah, it’s very bad form, it is bad, but they’re not doing illegal.’”
Tánaiste Frances Fitzgerald acknowledged Ms Daly’s arguments as extremely serious and the serious consequences if the issues were not dealt with. She would ask the line Ministers for a response to the schemes mentioned and said that if legislation was required it would be considered.
