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Sunday 16 December 2018


Spring Conference

Irish DB deficits surge by more than 160%

Written by Talya Misiri

Ireland’s defined benefit pension scheme deficits soared by more than 160 per cent during the first nine months of the year, LCP Ireland has revealed.

According to RTE, research by LCP Ireland found that the combined accounting deficit of Ireland’s largest private and public sector companies rose from €2.6bn at the end of last year to €6.8bn at the end of September.

The highest funded deficits at the end of 2015 were recorded by the Bank of Ireland with €736m, down from €986m in 2014. Also CRH with a total €449m from €635m in 2014 and Smurfitt Kappa €311m from €337m in 2014.

Of the firms analysed, Kingspan was the only company to report greater assets than funded accounting liabilities at 112 per cent.

The LCP noted that the companies involved in the research made contributions of more than €1.16bn to their pension schemes last year.

LCP partner Conor Daly said: "Despite positive returns from equity markets, pension scheme liabilities have increased very significantly over 2016 due to bond yield falls.There is little doubt that the aftermath of the UK Brexit referendum has had a negative impact.

"That, combined with the expansion of the ECB's quantitative easing programme, led to soaring deficits in many schemes in 2016."

Daly also stated that the “unexpected result of the US presidential election" has an impact on deficits.

"Bond yields in the US and across Europe rose in the immediate aftermath amid expectations of an increased US fiscal stimulus and this has certainly helped offset some of the deficit increases over 2016," he added.

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