No threat to private sector pensions
Published 17/11/2010 | 05:00
PRIVATE pension funds are likely to be safe under any bailout, experts insisted yesterday.
But public sector pensions could be hit if further austerity measures are imposed as part of the terms and conditions of a funding deal from the EU and the International Monetary Fund.
Taoiseach Brian Cowen stressed yesterday that people with savings in banks had nothing to fear.
He said the "overarching priority" of government policy was to ensure bank deposits were safe.
He told the Dail yesterday that the €100,000 state guarantee for deposits had no expiry date.
And pensions experts said there was no threat to private sector pensions.
Head of the Professional Insurance Brokers' Association Diarmuid Kelly said most private pension funds were already in deficit and any bailout would actually protect some of the funds in pensions.
This is because any bailout would make deposits more secure -- large amounts of pension money are sitting in deposits at the moment.
And financial adviser Liam Ferguson, of Ferguson and Associates, said people were worried about pensions they bought from banks.
They fear the banks could go bust, but Mr Ferguson stressed that banks only act as selling agents for pension funds, which are originated by life companies.
Life companies have far better capital buffers than banks.