Companies miss deadline for submitting plans to plug pension deficit
MANY companies with bust pension schemes are understood to have missed Sunday's deadline to submit plans to plug their deficits.
The Pensions Board opened its offices especially on Sunday afternoon in anticipation of a large surge in restructuring plans being submitted.
A spokesman for the board would not say how many companies with holes in their defined benefit pension schemes had missed the deadline.
He would only say a "significant" number of the broken company retirement schemes had met Sunday's deadline for outlining a plan to plug their deficits.
Chief executive of the Irish Association of Pensions Funds, Jerry Moriarty, said there were 900 defined benefit schemes in the State.
A defined benefit scheme is where employees are promised a set level of pension based on their years of service and their salary at retirement.
But the fact that people are living much longer than they were when these schemes were designed means that the promises, for the most part, cannot be met.
Mr Moriarty, whose organisation represents the trustees of pension funds, said his information was that the Pensions Board expected around 300 schemes to submit funding proposals to plug their deficits over a 10-year period.
Almost seven out of 10 defined benefit schemes were in deficit, he said.
Schemes that do not meet what is known as the minimum funding standard are required to put a plan in place to close off the deficit.
This involves greater contributions from employees and employers, or lower benefits for staff.
And some schemes are being wound up.
Mr Moriarty said members of pension funds had been let down by Social Protection Minister Joan Burton, who had promised an easing of the rules to give a fairer distribution of the assets in underfunded schemes to those still to retire but then withdrew this.
Employers' body IBEC said the regulatory rules were so severe that more than seven schemes a month were winding up.
The Pensions Board said it would be contacting the trustees of schemes in deficit that failed to submit a funding proposal by Sunday to set out the regulatory requirements.
IBEC's Brendan McGinty warned that an increasing number of defined benefit pension schemes would be wound up over the coming months.