The failure by the Government to reform rules on pension payments could see thousands of workers facing the loss of benefits, business leaders have warned.
Ibec said yesterday that doubts over regulations for workers near retirement could see pensions significantly reduced.
The employers’ group criticised the Government for failing to address the issue in the latest Social Protection Bill, which was published yesterday.
Social Protection Minister Joan Burton said she needed to examine a recent EU court ruling for Waterford Crystal workers. This could cost the Government an extra €300m in compensation payments.
Ms Burton’s office said yesterday that it had been decided not to proceed for now with provisions to change the pensions priority order — the way in which assets are disbursed when a defined benefit pension scheme winds up.
Ibec pointed out that the Government had promised to reform the pensions legislation.
Ibec director Brendan McGinty: “The failure to reform pension rules puts the entitlements of thousands at risk. Where a scheme is at risk of being wound up, the current rules give absolute priority to pensioners, leaving those scheme members who have not yet reached retirement age with only a small fraction of the pension they had expected.”
Ibec say the current rules mean a retired worker will have their full pension protected in a wind-up of a company. However, an employee aged 64 and months from retirement, may be left with little or no pension rights at all.
Fianna Fáil’s Willie O’Dea said the omission in the Bill would be a massive disappointment for tens of thousands of pension holders: “This failure will result in people who have already retired having priority on assets of insolvent pension funds ahead of colleagues that are still working.
“People who have been working all their life face the prospect of a huge reduction or even a total loss of pension entitlements while former executives of companies are guaranteed to receive very generous pensions.”
The bill also introduces changes to payments for lone parents.
Lone parents will lose one-parent family payments this year and be moved over to jobseekers allowance payments, under reforms. The Government yesterday said a transitional arrangement would make it easier for lone parents to claim payments. But parents campaigners said the move to jobseekers payments could see payments for lone parents reduced by €39 a week to €161.
Ms Burton’s department yesterday said parents in part-time employment moving schemes could face a loss. Parent’s group SPARK said lone parents would face severe losses.
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