Group urges rule change to fund defined benefit plans
THE Government was asked to implement "fairer rules" for company pension schemes to avoid the situation where those yet to retire lose out when plans are in trouble.
Changing the rules would make the funding position of defined benefit pensions easier, the Irish Association of Pensions Funds said.
Current rules on who gets what when a scheme is wound up mean that active members of the scheme lose out while pensions are largely protected.
Most defined benefit schemes are closed to new members, or have no benefits building up for future service of members.
This means that the risk carried by the shrinking population of active and deferred members will become more pronounced over time, especially as pensioners get priority over the assets in schemes, and because of low interest rates.
Chairman of the IAPF Maurice Whyms said his body has made a proposal to Social Protection Minister Joan Burton on the order of asset distributions when a scheme was being wound up.
There were fears that a large number of the almost 1,000 defined benefit company schemes would end up closing down as most of them are in a deficit situation.