The Pensions Authority has issued a notice stating that it may exercise its powers under the Pensions Act against underfunded defined benefit (DB) schemes. There are currently 61 DB schemes which have failed to reach the statutory funding standard and as a consequence are in breach of the Pensions Act. The Pensions Authority intends to exercise its new additional powers to ensure that the underfunded DB schemes reach the statutory funding standard.
The Tánaiste and Minister for Social Protection, Joan Burton, recently signed new Regulations which gives the Pensions Authority increased powers to issue directions to trustees to either restructure scheme benefits or wind up a scheme. In such instances, members of the scheme will be afforded the opportunity to make a submission to the Pensions Authority in respect of the Authority’s proposal. Members should firstly express their concerns to the trustee of the scheme.
To avoid such a direction from the Pensions Authority, trustees and employers are encouraged to engage with each other and expedite their efforts to resolve the funding deficit and implement a sustainable recovery plan as soon as possible.