Call to relax rules on private pensions
HALF of all private sector pensions that promise a fixed payment on retirement are in trouble, the country's biggest employer organisation warned yesterday. The solution is to relax the rules governing pensions, it added.
Some 47pc of businesses surveyed admitted that their defined benefit scheme did not comply with the minimum standard set by the Pensions Board, the Irish Business and Employers Confederation (IBEC) said after a survey of 253 members.
Three-fifths of employers are facing difficulties funding their defined benefit schemes, IBEC said.The schemes, which guarantee payments regardless of how stock markets perform, are struggling after share prices collapsed in the past two years.
Many employers also took 'pension holidays' during the good times, which saw them stop pay into funds when the markets were performing well.
"Unless the funding rules governing defined benefit pension schemes are urgently reformed, a significant number will collapse, with benefits being severely restricted," IBEC director Brendan McGinty said
IBEC's report is the latest in a long line calling for change.