IBEC Welcomes Deferral Of Pensions Deadline

Business & Finance - Economy

Wednesday, 13 October 2010 13:28

Written by Noel Cotter

Business lobby group IBEC has welcomed the deferral of the November funding proposal deadline for defined benefit pension schemes.

The deferral was announced earlier today by Minister for Social Protection Éamon Ó Cuív. The new deadline for proposals has yet to be announced by the Pensions Board.

IBEC Director General Danny McCoy said: "A recent survey found that approximately 80% of defined benefit pension plans fail to meet the statutory funding standard. This deferral will allow schemes and their sponsoring employers a more realistic opportunity to find better long-term and viable funding arrangements.

"Companies were being forced to make investment decisions to meet a draconian minimum funding standard in the short-term, but which would negatively impact the long-term viability of these schemes.

"The proposed revision of the defined benefit pensions model is welcome if it succeeds in better preserving the benefits to workers. It will allow employers and trustees to revise investment and benefit structures to ensure they have a more robust and sustainable future. Established solvency rules have meant that defined benefit schemes have had to rely too heavily on volatile equity investments up to now ."