Bank pension deficit rose to record €1.6bn last year
The pension deficit at Bank of Ireland rose to a record €1.6bn by the end of last year, putting additional pressure on the bank as it seeks to find a solution for the widening gap.
Chief executive Richie Boucher, who brought in the former head of the group's life division to review its defined benefit scheme, said yesterday that he expected to lay firm proposals on the table "within the next few weeks".
Discussions so far between the bank and various union representatives have centred around increasing the retirement age to 68, hiking staff and employer contributions and changing the annual rate at which pension payments increase.
A large internal consultation process on the contentious issue was completed recently.
The move follows rival Allied Irish Banks receiving the go-ahead from members of its defined benefit scheme to make them contribute 4pc annually, as of today.
The contribution will increase to 5pc next year.
Addressing the pension shortfalls and the size of the banks' respective market values are key issues for potential investors as both look to tap shareholders for capital over the coming months.