How State promotes ‘serious inequities’ in pensions

THE recent report from the Irish Association of Pension Funds (IAPF) that there has been a significant decline in the number of defined benefit pension schemes offered by employers is confirmation of one of the worrying developments in the pensions area.

The IAPF’s report showed that employers are increasingly choosing to offer defined contribution schemes, which means there is a transfer of responsibility and risk away from the employer towards the employee.

In a defined benefit scheme, the amount of income an employee receives on retirement is guaranteed, whereas in a defined contribution scheme the amount of money paid in is set, but the amount of income received on retirement is not.