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General

Q.1      My pension scheme is insolvent and is being wound up – what are the implications for me?
A.        The winding up of a defined benefit pension fund will have different implications for different members, with clear priorities set out in law. The first priority in a windup goes to the Additional Voluntary Contributions of members, followed by existing pensioners. In terms of pensions in payment, these are bought out by the purchase of annuities from insurance companies, so the pensions are guaranteed. However what can happen in such a situation is that any increases in pensions promised under the terms of the pension scheme e.g. annual indexation may not be available, or might be provided at a reduced level, in the future. After the pensions in payment have been looked after, the remaining funds within the scheme are divided among the “active” members (those still in employment) and the deferred members (who have left employment but are not yet receiving their pensions). Both of these have the same priority under the law, and their shares will be calculated by the scheme actuary in proportion to their entitlements under the rules of the scheme.

 
Q.2      I left employment well before normal retirement age but I was promised early retirement pension once I reached a certain age – why is this now being refused?
A.        The most likely answer is that the pension scheme is now insolvent but was not so when the original promise was made. Normally early retirement pension is discretionary, requiring the agreement of the trustees and/or the employer. Once a scheme becomes insolvent, the trustees are not allowed by law to pay early retirement pensions, unless the employer is willing, in each individual case, to make up the difference between the level of solvency that the fund actually has and the cost of purchasing an annuity for the person involved. Even if the pension scheme rules provide automatic entitlement to early retirement or do not allow the trustees to veto such an application, the Pensions Act was amended some years ago to allow trustees override the rules of the pension scheme and apply to veto to early retirement applications. In simple terms, the reason for this veto is that if the insolvency was at the level that the scheme could only pay 75% of benefit, a member seeking early retirement would be seeking to obtain 100% of benefit, to the detriment of the remaining members, and trustees could not lawfully allow this to happen. 
 
Q. 3     Must my employer provide me with a pension scheme?
A.       There is no legal obligation on any employer to set up a pension scheme for employees. If there is no pension scheme for which you are eligible, your employer must, however, make available a Personal Retirement Savings Account (PRSA), provide time for consultation in relation to it, and make appropriate deductions from salary and remit to them to the PRSA provider. The employer is not obliged to contribute to your PRSA. 
 
Q.4      My pension fund is "insolvent" – what does this mean?
A.        Under the terms of the Pensions Act 1990, every Defined Benefit pension scheme must produce, every three years, an actuarial funding certificate which certifies the solvency of the scheme -- that is, its ability to meet its liabilities for pension payments. The issue does not arise in relation to a Defined Contribution scheme as the benefits available are directly linked to the value available within the fund and there is no promise of a pension being calculated on the basis of the number of years of membership and final salary. The solvency of the defined benefit fund is measured as if the scheme was going to be wound up on the date of the certificate. Where the fund is not technically solvent, its total assets are less than its total liabilities. The employer and trustees must arrange for a "funding proposal" to be prepared by an actuary, and presented to the Pensions Board. This proposal will set out how it is proposed to bring the fund back to solvency over a period of anything up to 10 years. 
 
Q.5       What happens if they don’t submit a Funding Proposal?
A.        Either the Pensions Board can take action, and oblige the trustees to reduce the benefits being promised under the scheme, or the Trustees can submit an application to the Board under Section 50 of the Pensions Act, for permission to alter the benefit promise, i.e., to restructure the scheme. 
 
Q.6      My pension scheme is insolvent and is being restructured – what are the implications for me?
A.        This depends on what category of membership in the defined benefit scheme you fall into. Basically the employer and the trustees have to raise enough funds over a given period to make the pension scheme solvent. Insofar as existing pensioners are concerned, they receive first priority over everything except Additional Voluntary Contributions (AVCs), and their pensions are protected; but a promise to pay future annual increases, normally based on some form of index, may well be withdrawn. The trustees are obliged to consult with active members, deferred beneficiaries and pensioners in payment before making such a submission. Possibilities include future benefits being reduced, contributions being increased (for both the employee and employer), entry to the scheme being closed for new employees or the entire scheme being replaced by a new type of "hybrid" scheme, possibly involving a “cap” on the defined benefit promise and perhaps defined contribution provision in excess of the “cap”.
  
Q7.      I have a problem with my Social Welfare Pension (now called the State Pension). Who do I talk to?
A.        The Pensions Ombudsman's Office cannot deal with State Pensions (contributory / non contributory), difficulties with entitlements, pension books, living abroad, broken service, missing stamps etc. or other Social Welfare issues. In the first place you should contact the Pensions Services Office of the Department of Social Protection (Formerly the Department of Social and Family Affairs) at College Road, Sligo Tel: 1890 500 000 where you can ask for advice and/or a ruling. If you are not happy with the initial ruling, you have a right to appeal to an independent Appeals Officer at D'Olier House, D'Olier Street, Dublin 2. Tel: Local 1890 74 74 34. Finally, if you are not happy with the decision on the Appeal, you can send your complaint to the Ombudsman, 18, Lower Leeson Street, Dublin 2 - Telephone: 1890 223023 who deals with, among other things, the decisions of Government Departments.  
 
Q8.      I am confused as to who is responsible for my pension problem as I hear of Trustees, Administrators, Scheme Providers, Insurance companies etc?
A.        In occupational pension schemes, the trustees are legally responsible for the conduct of the scheme. In PRSAs, it is the PRSA provider who is responsible. Where trustees employ the services of third parties, such as insurance companies, insurance intermediaries and outside administrators, the Pensions Ombudsman can generally grant redress against whoever was actually responsible for the event that gives rise to the complaint or dispute - which could also include the employer, in an occupational pension scheme. In investigating a complaint, we will contact the appropriate people.
 
Q9.      What is an Occupational Pension Scheme?
A.        An Occupational pension scheme is where the employer has a pension scheme set up for the benefit of staff members; there are usually 2 types of schemes Defined Benefit (DB) and Defined Contribution (DC). but "hybrid" schemes involving both DB and DC elements are increasingly common.
 
Q10.    What is a PRSA?
A.        A PRSA is a pension that you can take from employment to employment, it is set up in your name and its assets are held exclusively for you. It is for people who do not have access to an occupational pension scheme. It differs from an occupational pension plan in that there are no trustees - it is set up in your own name.
 
Q11.    What is a Trust RAC?
A.        RAC is shorthand for Retirement Annuity Contract, sometimes called a Personal Pension Plan. It is designed for the self-employed and for those in non-pensionable employment. It is a direct contract between the worker and the provider and behaves very like a PRSA. It can be converted into a PRSA under certain conditions. Its proceeds cannot be transferred to an Occupational Pension Scheme. Under the Taxes Acts, some group RACs were set up under trust, which is allowed if the scheme is set up for the benefit of the majority of those working in a particular trade or profession. Because these schemes involve trustees as well as providers, Trust RACs were brought into the jurisdiction of the Pensions Ombudsman by the Social Welfare and Pensions Act, 2007.
 
Q12.    What information should I receive automatically and on a regular basis about my pension? After leaving employment/changing jobs, will I still receive this information?
A.        Every member of a pension scheme is entitled to receive certain information. Please see the Pensions Board booklet, "What Do You Know About Your Pension Scheme?" for details.
 
Q13.    Is there a time limit for a response from Trustees/Pension Provider to a query I have on my pension?
A.        There is no fixed time limit for all requests. Some may be covered by the Disclosure of Information Regulations made under the Pensions Act, which set down particular time limits. See the Pensions Board booklet, "What Do You Know About Your Pension Scheme?" for details. However, you should always put you request in writing / email / fax and keep a record of any subsequent phone calls. Be as clear and precise as possible in your request and ask specifically when a response might be expected. You could also check whether the provider has a Customer Charter setting out response times.
 
Q14.    What is an integrated pension and how does this affect my occupational pension?
A.        This type of pension is also known as a co-ordinated pension where the scheme benefits are designed to take account of any pension which you might get from the State. The object is that the two pensions, when added together, make up a particular target total benefit. There are different ways of getting to that result. See the Pensions Board booklet, "A Brief Guide to Integration".
 
Q15.    What are Pension Adjustment Orders and where can I get advice?
A.        Pension Adjustment Orders (PAOs) are instructions by the courts on how pension benefits are to be divided between parties who are undergoing a judicial separation or divorce. Advice must be sought from your own solicitor/legal advisor. The Pensions Ombudsman has no function in the granting of a PAO. However, if your complaint relates to how the PAOs is being applied to your benefits, he may have a role. See the Pensions Board booklet "A Brief Guide to the Pension Provisions of the Family Law Acts" for further information.
 
Q16.    Can I "cash" in my pension?
A.        If you have been working for less than two years, you can receive your own contributions back, but not your employer's, less tax. If you have been working for more than two years, then the answer is NO. But the contributions are not lost. They can be either kept for you in the same pension scheme (called Preserved Benefits) until you reach retirement age or you may be able to have them transferred to another pension scheme if you take up employment again and your new employer operates a pension scheme.
 
Q17. Is overtime pensionable?
A.        This depends on the rules of each individual scheme. In general, it is safe to say that overtime is rarely taken into account for pension purposes. However, in some areas of the Public Service, an element of overtime may be pensionable, under certain very strictly defined conditions.