Employees warned on new pension deals as more companies expected to close schemes
Workers have been warned that more traditional company pension schemes will close. They have been advised to ensure their employer makes the same level of contribution into a new scheme.
It comes after shock news that the largest pension provider, Irish Life, was closing its staff defined benefit (DB) scheme.
Jerry Moriarty, chief executive of the Irish Pension Funds Association, warned that more schemes would go.
Mr Moriarty said Irish Life was following the trend of banks and insurers ceasing to contribute to defined benefit schemes in this country and around the world.
This was due to the high cost of defined benefit schemes and the volatility that comes with them for sponsoring employers.
DB schemes in the private sector pay a pension of two-thirds of employees' salary at retirement at age 65, for those with 40 years' service.
They are being replaced by defined contribution schemes, where the pension depends on the amount contributed to the plan and the investment return.
Mr Moriarty said it was important for employees to get a good rate of contributions paid by their employer if they are being moved into a defined contribution scheme.
This should match DB contributions, which are often up to 15pc of salary.