Musgrave made radical changes to its scheme
Published 12/03/2010 | 05:00
FOOD distribution group Musgrave has had a defined benefit scheme for its staff in operation since the 1960s, but has recently radically restructured it.
The scheme had originally been non-contributory, which means that staff were not making any contributions.
About five years ago staff started paying 6pc of salary into the scheme and the retirement benefits were scaled back, human resources director and trustee Noel Keeley told the Mercer seminar yesterday.
But despite this the scheme still ended up with a large deficit in 2008, the worst year on record for Irish pensions.
Changes in pensions' legislation last year allowed the scheme to apply for a changes to the accrued benefits of members under Section 50 of the Pensions Act.
The guarantee of a rise for those receiving pensions was removed, while the scheme was also closed to new entrants, Mr Keeley told the conference.
Some 52 presentations were made to active, deferred and retired members.
The scheme has also been "de-risked" with an investment strategy of moving away from investment in equities and into bonds.
The riskier element of the investments has been set aside to pay discretionary increases of pensions in payment.
The scheme is now fully funded. Staff will get one-sixtieth of final salary for each year of service.