'Serious losses' for pensions in 2008

The Pensions Board has said "serious losses" were sustained by Irish pension schemes last year and that "the experience of 2008 was worse than it could, or should, have been".

At the launch of the Pensions Board Annual Report today by Social and Family Affairs Minister Mary Hanafin, the Board emphasised the serious losses sustained by both defined benefit and defined contribution schemes in 2008.

Chief executive of the Pensions Board Brendan Kennedy said: “2008 was an extremely difficult year for pension savings, and the retirement plans of very many individuals have been badly affected.

"The falls in investment markets worldwide in 2008, which continued in early 2009, have resulted in sharp falls in the value of most defined contribution pension savings, whether occupational pensions, PRSAs or personal pensions.

"There has also been a significant deterioration in the solvency of defined benefit schemes where very few schemes now meet the funding standard, and a small number do not have enough assets to meet the liabilities of current pensioners.”

Although pension losses were unavoidable, the experience of 2008 was worse than it could, or should, have been, Mr. Kennedy stated/

“Too many schemes did not take account of the investment risks they were running in 2008. Too often it seems that schemes’ primary goal is to keep contributions to a minimum and they give little or no thought to risk."