Tuesday 12 December 2017

Government accused of dragging out pensions plan

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Charlie Weston

Charlie Weston

THE Government has been accused of dragging its feet on plans for a new universal pension for the one million people who are not members of a scheme in their job.

The Irish Association of Pension Funds said now was the time to introduce a new scheme to avoid a generation struggling financially in retirement.

The IAPF also called for the relaxing of the rules around defined benefit pensions, which are struggling over low interest rates.

Speaking ahead of a conference today, chief executive of the IAPF Jerry Moriarty said there was a urgency around introducing a new mandatory second pillar pension scheme.

Social Protection Minister Leo Varadkar recently said he was in favour of such a scheme, but it could take 10 years to implement it.

"The minister has indicated his support for universal pensions, and we agree with him that it is imperative that we address the issue now, while we have the opportunity.

"It has been parked for too long and we owe it to future generations to start something now so we can pre-empt the challenges of changing demographics."

Mr Moriarty, whose organisation represents pension fund trustees, cautioned against making changes that would make it more difficult for good employer schemes that currently exist.

Delegates are today set to hear calls for changes to the rules imposed by regulator, the Pensions Authority, on defined benefit (DB) schemes.

DB schemes promise to pay a set level of retirement income based on years of service and the final salary, but large numbers are in deficit.

He said the minimum funding standard was making it difficult for defined benefit pensions to survive.

Schemes have to meet the minimum funding standard, which states that defined benefit schemes must have sufficient assets to secure pensioner liabilities and other members' benefits in the event of scheme wind-up. The fall in interest rates to all-time lows means the liabilities have shot up.

Mr Moriarty said this rule does not apply to public sector pensions.

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