Government To Support Pension Schemes
Updated : Apr 27, 2009
The Government has announced a series of measures designed to support pension schemes at companies that have become insolvent.
The Pension Insolvency Payment Scheme, along with changes to the Pensions Act, is to be finalised in the Oireachtas this week.
The scheme will be run by the National Treasury Management Agency.
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It is thought that up to 90% of defined benefit pension schemes in the private sector are running a deficit, a gap that could be as large as €30bn.
The trustees of a scheme can now pay a sum to the Government, which would cover the cost of paying the pensions of their retired members, instead of having to buy annuities from insurance companies.
It is hoped that this would lead to significant savings that could be put towards the pensions of those people who have yet to retire.
In addition, Minister for Social and Family Affairs Mary Hanafin has announced proposed amendments to the Pensions Act.
The changes would ensure that pain is shared more equally among members of schemes that either need to be restructured or that are wound up with a deficit.
