Written answers

Wednesday, 23 September 2009

Department of Social and Family Affairs

Pension Provisions

9:00 am

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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Question 150: To ask the Minister for Social and Family Affairs the number of defined benefit pension schemes which currently fail the minimum funding standard; and the number of same which are below 25% of the standard, 50% of the standard and 75% of the standard. [32741/09]

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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Under the Pensions Act 1990, defined benefit pension (DB) schemes must meet a minimum funding standard which requires that schemes maintain sufficient assets to enable them discharge accrued liabilities in the event of the scheme winding up. Where schemes do not satisfy the Funding Standard, the sponsors/trustees must submit a funding proposal to the Pensions Board to restore full funding, normally within three years. In certain circumstances the Pensions Board can allow additional time for proposals to restore full funding, with maximum periods of more than 10 years allowed as a temporary measure to ease the pressures being felt by many pension schemes.

Under the Pensions Act and associated regulations, defined benefit schemes are required to assess once every year whether they meet the funding standard. Not all schemes have the same reporting date, but the Pensions Board in its Annual Report for 2008 estimated that approximately 90% of defined benefit schemes did not meet the funding standard. Since that date, as a result of improvements in investment markets, the solvency of most schemes has improved. However, the situation is still a cause for great concern, and I encourage scheme trustees and sponsoring employers to continue to work with the Pensions Board to address these issues as a matter of urgency.

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