Warning on pension schemes
Legislation being proposed by Opposition parties to stop profitable companies winding up pension plans will hasten the decline of the retirement schemes, it has been claimed.
Fianna Fail's Willie O'Dea, Labour's Willie Penrose and Sinn Féin's John Brady have each produced private members' bills designed to stop solvent firms shutting underfunded defined-benefit pension plans.
But a pensions seminar was told that the effect of the proposed legislation will be to hasten the decline of defined-benefit schemes.
A pensions briefing, organised by the Chartered Institute of Management Accountants and Goodbody Pensions, yesterday heard there has been a rise in employers seeking information on how to wind up defined-benefit schemes since the new proposals were introduced in the Dáil. There are now just 700 defined-benefit schemes, compared with 2,031 back in 2000.
Partner in pension advisory firm Lane Clark & Peacock (LCP) John Lynch said the legislation was likely to have unintended consequences.
The proposed pensions legislation was well intentioned, but had the potential to hasten the decline of defined-benefit schemes.