Some 50,000 people who paid into defined benefit pension schemes that have since wound up will be left with nothing as a result of the exclusion of a retrospective function from newly published legislation, Fianna Fáil has said.
The party's social protection spokesman Willie O'Dea said the Pensions (Amendment) Bill 2013 was too little too late and that lengthy "dithering" by Minister for Social Protection Joan Burton had left thousands of workers out of pocket.
The Bill offers people actively paying into defined-benefit schemes a greater level of protection should the scheme be wound up or restructured but it will not be applied retrospectively, while some retired members may no longer be entitled to full payment if their scheme falls into difficulty.
'Discriminatory'
It guarantees workers 100 per cent of their defined benefit pension up to a threshold of €12,000 but for those entitled to larger sums there are different levels of cover when it comes to double and single insolvencies, which Mr O'Dea described as "discriminatory".
Age Action said it was worried the rule changes would penalise retired people who “worked a lifetime and contributed over that working life towards a pension” and people approaching retirement.
“In both cases, these people have little scope to recover if their expected pension payment changes dramatically,” Age Action said.
The older people’s charity said the minimum guaranteed payment of €12,000 was not high enough as some with a defined benefit pension were not entitled to the State contributory pension to top up their income. “Alone, €12,000 per annum would leave people on the brink of poverty,” Age Action said.
Sinn Féin said the Bill represented “an improvement on the current situation” but it did not get the balance right.
Gold-plated pensions
"In order to protect high-end gold-plated pensions, workers approaching retirement age will remain woefully unprotected," Sinn Féin social protection spokesman Aengus Ó Snodaigh said.
He said the use of the pension levy to fund shortfalls in the case of a double insolvency would represent “double accounting” as the levy had previously been allocated to the exchequer deficit.
The Bill was aimed at addressing Ireland's compliance with an EU directive on insolvencies. It follows a European Court of Justice ruling that Waterford Crystal workers had not been adequately protected after the company went into receivership.
Unite trade union said the Government had taken a “minimalist” approach to complying with the directive.
The Waterford Crystal case is to come back before the Irish courts following the European ruling.
