I welcome the Minister for Communications, Energy and Natural Resources, Deputy Pat Rabbitte. I appreciate his taking time from a busy schedule to respond to the issue I am raising. I am taking the opportunity to seek clarification and reassurance on behalf of ESB workers in the context of the recent revelation of a significant shortfall in that company's pension fund.

I have been contacted on a daily basis in the past few weeks by ESB workers throughout Laois, Offaly, Kildare and the midlands. The ESB is a strong, well respected and valued employer. Generations of families have been employed in the ESB throughout the midlands over the years. There is unnerving news that the ESB pension scheme is in deficit to the tune of between €1.6 billion and €1.7 billion. It is difficult to see how it can occur in a highly successful and profitable semi-State company with international status. It pays substantial annual dividends to the State on behalf of the taxpayer.

An area of concern to the workers is that the management has unilaterally changed the status of the pension scheme from a defined benefit scheme to a defined contribution scheme. I fell victim to the same thing when I was employed in the newspaper industry. That also rings alarm bells for workers looking forward to retirement in years ahead and the significant impact it will have on their entitlements. Due to the financial flux in the sector and the industry in the past few years, Waterford Crystal workers were left high and dry. It is not a parallel but it rings alarm bells. In companies in the private sector, pension schemes are seeking a write-down from the Pensions Board in respect of exposure and what is due to workers. I hope the Minister can bring clarity and reassurance to the area, particularly because the ESB pension scheme is the largest funded pension scheme in the country, with liabilities in the region of €5 billion. This is a worrying signal to all workers in the public, private and semi-State sectors if they cannot rely on, and trust, a pension scheme in a gilt-edged company such as the ESB. What hope do workers in other companies have when they do the prudent thing and contribute on a weekly basis to their pension for retirement?

I am here out of respect for the House and my understanding is I will be here again next week to deal with legislation.

The Minister is always welcome.

I am grateful for that, Sir, but perhaps I can have the temerity to say that, as a Member of the Lower House, I was advised at some stage today that I should be here at 5.55 p.m. It is now 8.20 p.m. and, without intruding into the affairs of a House of which I am not a Member, if it is the wish of the Seanad, as it ought to be, to have Ministers come into the House to deal with issues for which they are responsible, I respectfully suggest Members should be able to organise their business more efficiently than inviting me to be here at 5.55 p.m. I changed two commitments I had this evening in order to be here. In the Lower House if one has to reply to a Topical Issues matter at 5.43 p.m., the Minister is present at 5.43 p.m. I make these remarks with due respect.

On behalf of the House, I apologise to the Minister. There was a late change in the Order of Business which resulted in this situation. It is not normal. I was a Minister of State, too, and came to the House many times as Minister of State. In this situation, there was a change and we apologise to the Minister and thank him for coming. It will not happen again.

I am grateful to you, Sir.

I understand the issues concerning the ESB pension scheme, which has some 13,700 members, need to be handled sensitively and carefully. I am pleased to provide what information I can, which was provided for my Department by the ESB.

In late 2008 the trustees of the ESB superannuation scheme brought forward the tri-annual valuation of the scheme by one year to assess the financial health of the scheme. The actuarial valuation to 31 December 2008 showed an ongoing valuation deficit of €1.9 billion and a minimum funding standard deficit of €1.8 billion. As required by the scheme rules, the ESB and the ESB group of unions formed a working group to assess how best to address the reported deficit and to protect as far as feasible the interest of the ESB and the current members of the scheme. The ESB reached an agreement with staff in 2010 to resolve the pension deficit. That agreement closed the scheme to new entrants, it broke the link between salaries and future pension increases and introduced a solvency test for future pension increases. The measures adopted under that agreement have, I understand, had a positive effect, resulting in the scheme actuary recently reporting that the scheme is now in balance on an on-going actuarial basis.

Aside from the ongoing actuarial position, the Pensions Board also requires the ESB scheme to assess whether it could meet a certain prescribed standard, known as the minimum funding standard, MFS. This effectively tests whether the scheme could meet all its current obligations if it were wound up immediately, in other words, if everyone retired from the company on Friday. Neither the Government nor the ESB envisages the winding up of the scheme or everyone retiring on Friday, but, regardless, the scheme is still required to meet the requirements of the minimum funding standard.

I understand the scheme actuary reported at the end of 2011 that the ESB scheme, like many others, did not at that time satisfy the MFS requirements. I assume this is the deficit to which Senator John Whelan is referring in his question. I understand the Pensions Board does not require the MFS deficit to be addressed immediately but does require that a plan be developed to address it over a reasonable time. I am informed that the trustees of the ESB scheme, with the agreement of ESB, submitted a funding plan to the Pensions Board, which was approved in October 2012. I am also informed that this plan aims to eliminate the deficit by 2018 and that this plan remains on track.

In common with other companies where the Irish Government is the principal shareholder, the scheme is governed by legislation and supplementary regulations. I understand that, in the event of a deficit arising in the scheme, the regulations require that the relevant parties meet to agree a mechanism to address the deficit. I understand that in August 2013 solicitors on behalf of a small number of members of the ESB scheme served a plenary summons on solicitors for the ESB and, therefore, the issue is subject to judicial proceedings.

With regard to the manner in which the ESB accounts for the scheme in its financial statements, my Department has been assured by the ESB that, having taken expert legal and financial advice, the company is entirely satisfied that the current accounting treatment for the scheme is correct and in accordance with applicable laws and international accounting standards. I trust that this provides some clarity for the Senator.

I am grateful to the Minister for the information. In the matter he raised, I would like to respond by saying it is not on the part of the Senators that the schedule was changed at 2.30 p.m. to reschedule the business of the House. I had anticipated the question would be taken at 6 p.m. With no disrespect, the question was tabled last Wednesday and deferred at the Minister's request to be taken this week at a more suitable time.

I am grateful for the response but for the ESB workers it is a worrying transformation in how the pension scheme is being handled and dealt with in the company. The ESB group of unions is going so far as to describe it as a pensions crisis. From speaking to workers, it is leading to unease and some of them are talking about industrial action and unrest. No more than the workers, the Minister would not relish that outcome if the workers did not find comfort in the reassurances of the ESB. The last thing we need heading into the winter months is industrial unrest from a company of such strategic importance to our economic recovery as the ESB.

I agree with the Senator. The last thing the country, the economy and private domestic consumers need is industrial unrest. I genuinely do not believe there is any serious cause for industrial unrest. The ESB pension scheme is absolutely sound. There is no comparison of any kind to be drawn with Waterford Glass and the tragic circumstances that happened there or in any other private failed pension scheme. The ESB pension scheme is one of the most robust in the country. It is not the fault of the ESB unions or ESB management that the pensions board requirement in respect of the application of minimum funding standards has created a situation whereby a scheme that previously was in sync now has a temporary deficit, but the plan entered into between the trustees and the company will bring the fund back in sync by 2018. I am aware, of course, that judicial proceedings are pending and it is not for me to comment on what will happen in the courts. However, I honestly believe the pension scheme is sound. I can understand why it is so important for the workers concerned but in my best judgment there is not any cause for concern or unease on their part. Everybody knows that the ESB is not going to close down on Friday evening, nor will all the employees be going out on pension at the weekend. Therefore, the concerns will not be realised.