The Social Welfare and Pensions (No. 2) Act 2013 came into force on 25th December 2013 and adds to recent adjustments that have been made regarding the reduction of benefits payable to persons who have reached pensionable age or are currently receiving benefits and in relation to priorities of payments on the winding up of schemes.
Section 50 of the Pensions Act 1990 makes provision for a direction by the Pensions Board to allow trustees to reduce benefits which would be payable to members then still in employment where the trustees have failed to submit an actuarial funding certificate within the required period or where the actuarial funding certificate certifies that the scheme does not satisfy the funding standard and the trustees have not submitted a funding proposal in accordance with Section 49. The Social Welfare and Pensions Act 2012 extended this to persons who have reached normal pensionable age or are receiving benefits under the scheme and the Social Welfare and Pensions (No. 2) Act 2013 added certain prescribed limits.
The new sections prohibit any reduction of an annual pension which is €12,000 or less. For pensions greater than €12,000, a reduction of up to 10% can be made where the annual pension is between €12,000 and €60,000 and of up to 20% where the annual pension is greater than €60,000. No reduction can be made which would reduce a pension to below €12,000 or which would reduce a pension to below €54,000 if the annual pension is €60,000 or more.
Section 48 of the Pensions Act 1990 dealing with priorities on winding up of a scheme has been extended by the 2013 Act which introduces detailed new provisions for priorities on the winding up of a scheme.