Auditors say US pension plan not in danger from AIB
Auditors to AIB's US pension scheme have highlighted the dependence the bank has on ECB and Irish Central Bank funding in its annual report, although it does not believe the bank's currently fragile position should impact on the plan in the foreseeable future.
The pension plan, set up in 2003, took over many of the pension liabilities of Allfirst, the former AIB subsidiary. The plan is a defined contribution plan covering employees of AIB in various parts of the US.
The auditors state "there are a number of material economic, political and market risks and uncertainties that impact the Irish banking system, including the plan sponsor's continued ability to access funding from the euro-system and the Irish Central Bank to meet its liquidity requirements".
The auditors of the plan add that this raises substantial doubt about the company's ability to continue as a going concern. But it sees no danger from this to the plan at present.
"Plan management does not expect the financial situation to have any impact on the plan in the foreseeable future," it said.
Many of the plan's investments are held in funds run by T Rowe Price who are also the trustees of the scheme.
The annual report reveals that members of the plan may borrow money from it for house purchases up to certain limits.
"Most loans must be repaid within five years. If the loan is made for the purpose of purchase or construction of the primary residence of the participant, then such loans may be repaid over a period more than five years, the maximum being 30 years," states the report.
"The loans are secured by the balance in the participant's pension account," it points out.
At December 31, 2010 and 2009, there were 30 and 20 individual loans outstanding, respectively.