ONE in four defined benefit pensions is set to wind up by the end of the year, a new study has found.
This means that 250 company pension schemes are due to have disappeared by the end of the year, according to research by the Irish Association of Pension Funds.
There were 1,000 defined benefit schemes at the end of last year, but this will be down to 750 by the end of this year, chairperson of the Irish Association of Pension Funds, Rachael Ingle, is set to tell a conference today.
A defined benefit fund promises to pay a pension based on the final salary and the length of service. But the fact that people are living longer, modest investment returns and tough regulatory rules have meant most schemes are unable to deliver on these promises.
"This can be a traumatic situation for the employees.
"Never have employees needed the support of their Government to such an extent," Ms Ingle said.
The survey also found four out of five schemes that close are generally replacing the defined benefit scheme with a defined contribution arrangement.
With a defined contribution scheme, the final pension will depend on the level of contributions and the performance of the investments in the fund.