Urgent reform of pension wind-up priority order sought

Employers, unions and pensions industry unite to call for action to protect workers’ benefits

“In the private sector and commercial State companies, pension promises have not been fulfilled, with most defined benefit pension funds now in serious deficit,” said Fionán O’Sullivan, director of corporate pensions with IFG.

“In the private sector and commercial State companies, pension promises have not been fulfilled, with most defined benefit pension funds now in serious deficit,” said Fionán O’Sullivan, director of corporate pensions with IFG.

 


Employers and unions joined with the pensions industry yesterday to issue an “unprecedented” collective call for action from the Government to address what they called the “crisis facing the pension of thousands of workers”.

They said that defined benefit, or final salary, pension funds covering an estimated 30,000 employees – 15 per cent of all such scheme members – had failed to deliver recovery plans for their troubled schemes by a deadline last Sunday.

“Nearly 65,000 employees have already been affected by the cessation of more than 400 defined benefit schemes since the end of 2008. We expect scheme closures to continue over the coming months. Many of these could be prevented if the Government now takes action,” said Ibec, the Irish Congress of Trade Unions, the Irish Association of Pension Funds and the Society of Actuaries in Ireland.

“If the Government is not going to take practical measures to slow the rate of scheme closures it should at least take immediate action to ease the worst effects of these closures.”

The “simple truth” is that the failure by the Government to address the order in which people have priority on pension funds being wound up means “people of working age continue to risk losing everything before scheme pensioners can be asked to give up anything”.

Separately yesterday, financial services group IFG said employers with defined benefit schemes will have “no other option but to close them down and move their staff into defined-contribution schemes instead”.

“In the private sector and commercial State companies, pension promises have not been fulfilled, with most defined benefit pension funds now in serious deficit,” said Fionán O’Sullivan, director of corporate pensions with IFG.