It is time to help private funds

Pension apartheid

The tens of thousands of people who face genteel poverty in their old age because the defined benefit scheme they paid into for decades turned out to be something closer to a Ponzi scheme than a reliable investment will greet the news that the Government bailed out UCD and Trinity pension schemes to the tune of €14m last year with justifiable envy.

Another €15m has been set aside by the Department of Education to plug deficits at five other universitities later this year. This is not the first time taxpayers’ funds have been used to rescue underfunded public sector pension funds. In 2009, 14 state or university pension schemes were brought under the umbrella of the the National Pensions Reserve Fund, guaranteeing pensions but at a huge cost to taxpayers.

No such largesse has been shown to private sector workers who depend on barely solvent pension funds; indeed the opposite is the case. A levy was imposed on private sector pension funds without any corresponding charge on public pension funds. That the workers covered by this most recent rescue package generally retire earlier and on far better pensions than their private sector peers who have paid far more for pensions that will not materialise rubs salt into a festering wound. It is time Government treated all workers who paid for pensions that will not materialise equally. Its current policy supports one group while abandoning another to poverty is divisive, unsustainable and simply wrong.