Ibec chief accuses Government of ‘malign neglect’ on pensions
McCoy questions whether defined benefit pension schemes now too dangerous
Ibec chief executive Danny McCoy questioned whether the main focus of industry efforts should be on looking at the best way to wind down defined benefit pension schemes. Photograph: Alan Betson
“Malign neglect” by the State is jeopardising not only the pension rights of workers but also the very survival of companies, Ibec chief executive Danny McCoy said yesterday,
Speaking at a seminar hosted by the business lobby group, Mr McCoy questioned whether defined benefit (final salary) pension schemes were now too dangerous and whether the main focus of industry efforts should be on looking at the best way to wind them down.
Pensions consultant Brian Mulcair said a recent survey by his company, Towers Watson, indicated that just 20 per cent of defined benefit schemes in Ireland were now open to new members. One in 10 has wound up their final salary scheme or expects to do so.
Loughlin Deegan, a solicitor and employment rights and pensions adviser with Ibec, attacked the Government’s failure to deliver on repeated promises to address the “manifestly unfair” priority order when schemes are wound up. At present, retirees’ entitlements must be met in full before any provision is made for “active” (working) scheme members or those who have deferred their pension. With over 80 per cent of DB schemes in deficit, this means that many of the 190,000 active scheme members will receive just a fraction of their entitlements if schemes are wound up.
“I’m always surprised that this does not get more coverage in the media and that pension scheme members are not steaming and going to their TDs and others,” said Mr Mulcair.
Unlike the UK, there is nothing to prevent profitable companies in Ireland walking away from their pension schemes.