IBEC welcomes pension proposals

IBEC has described as helpful new modifications by the Pensions Board to its guidelines for Section 50 pension scheme funding applications, but has said they don’t go far enough to safeguard the future of many defined-benefit schemes.

The employers’ representative body has been one of the fiercest critics of the Pensions Board’s recent change to Section 50 application guidelines (which are made to seek permission from the body to reduce benefits previously offered within occupational pension schemes, to meet the minimum funding standard requirement).

IBEC and industry consultant Mercer have suggested a more rigorous set of rules could lead to the end of many existing schemes.

“We would have a wider point of concern over the terms of meeting the requirements and we feel it will herald a flight from defined-benefit schemes and lead to more companies winding up schemes.

“These guidelines are just encouraging employers to close defined-benefit schemes. We will be continuing to lobby Government on the issue,” said IBEC’s director of industrial relations Brendan McGinty, yesterday.

Mercer recently wrote to clients suggesting it might not be feasible to formulate a recovery plan for schemes (around 90% of all defined-benefit schemes, here, have funding shortfalls) meaning many may have to be wound up. It declined to comment yesterday.

A spokesperson for the Pensions Board couldn’t be contacted yesterday, but the body has already stated its updated guidelines are aimed at ensuring pension schemes can be assured of coping in adverse economic conditions.

The Pensions Board has also said the guidelines are no stronger than previous levels and that they would ultimately mean more people would be members of a scheme that can meet its promises.