Call for action over pensions

SWIFT Government action is needed to ease growing pressure on private pensions due to the meltdown on global stock markets.

Some defined benefit schemes are in danger of collapsing while those on defined contribution plans who are close to retirement risk having their future pension income cut sharply.

Due to the present difficult circumstances Patrick Burke, chairman of the Irish Association of Pension Funds, has called for Government intervention to protect the retirement plans of thousands of Irish workers.

The first nine months of 2008 has seen €20 billion wiped off the value of managed pension funds as stock markets buckled under the strain of the global credit crunch undermining pension values, he said.

Addressing the association’s annual conference yesterday, Mr Burke said his association would put proposals shortly to Government on how to deal with the crisis.

Those on defined contribution pension plans risk having their retirement income severely eroded if they have to buy annuities in the present climate, he said. To ease their lot, Government should allow retirees to postpone buying annuities until the markets have recovered.

The conference was told that some private sector defined benefit pension schemes would come close to collapse over the coming months, unless action is taken to address the emerging shortfalls.

Age Action Ireland welcomed the association’s initiative, saying everyone needed to think outside the box.

Minister for Social and Family Affairs Mary Hanafin attempted to play down the concerns voiced at the conference.

There was no evidence of any pension schemes collapsing and she said most people nearing retirement should have had their savings already in safe funds and should not suffer any loss of income.