Union accepts NIB hybrid pension plan

A NEW hybrid pension scheme at National Irish Bank (NIB) has been given the green light by finance trade union IBOA, whose members yesterday voted to ratify the scheme, writes Fiona Reddan.

From August 1st, all new NIB employees will be offered the scheme, containing elements of the defined benefit and defined contribution pension models.

This should provide a new employee who joins at 20, stays to the age of 65 and contributes in full, with a pension worth 64 per cent of final salary, based on conservative actuarial assumptions. Current staff will remain in the bank's defined benefit scheme.

Larry Broderick, general secretary of the IBOA, described the agreement as a "significant development" in the context of the debate on occupational pensions.

"This new development provides further evidence for employers that the switch to a defined contribution scheme is not the only solution to their concerns over their future pension liabilities," he said.

NIB is the third Irish bank to adopt the hybrid approach to pensions provision for new employees, following similar schemes introduced by both AIB and the Bank of Ireland.

The agreement also provides for permanent health insurance fully funded by the bank to be made available for all staff, with effect from next February, while all current staff who are represented by IBOA are also to receive an additional day's leave on a once-off basis in 2009.