Ibec warning over pensions

Ibec has attacked the Government for not doing enough to solve the employee pension crisis, and has warned that the point where several schemes will wind up on a weekly basis is fast approaching.

Addressing the organisation’s own pensions seminar in Dublin, today, Ibec’s industrial relations and human resource services director Brendan McGinty said one reason why many defined benefit schemes will not submit funding proposals ahead of the upcoming deadline is that they are being forced to wind up.

Noting the recent annual report of the Pensions Board finding that an average of seven defined benefit pension schemes were being wound up every month, in 2012, Mr McGinty said this figure is likely going to accelerate over the coming months.

He added that theyexpect to shortly reach the point where several schemes will be winding up every week.

“The Government has taken no action to either slow the rate of scheme closures, or off-set the worst effects of these closures. By the end of last year, seven schemes a month were being wound up, but information from Ibec member companies suggests this figure will accelerate over the coming months,” he added.

“Pension schemes are in a state of crisis and government inaction is making matters worse. Rules governing the distribution of pension funds on wind-up mean that people of working age must lose everything before pensioners can be asked to give up anything.

“The Social Welfare and Pensions Bill, published on May 22, could have addressed this issue, but nothing was done.

“A massive problem, with profound implications for employees right across the country, remains unresolved,” Mr McGinty said.

He said the Government’s recent refusal to rule out a new pensions levy, after 2014, is “yet another unwarranted attack on those trying to save for retirement”.

“The Minister for Finance confirmed in Budget 2013 that the levy would not continue beyond 2014.

“It is vital that the Government honours this commitment. Any new levy would further deplete pension savings and hit those that had the foresight to save for their retirement,” he added.

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