10/11/2011
By Adam Cadle
Recovery plans for defined benefit schemes (DB) submitted to the Irish Pensions Board by midday on 16 December 2011 will continue to be considered under the current funding standard and guidance.
Updated guidance will be drafted in towards the end of the year and will inform non-compliant DB schemes of the dates in which recovery plans must be submitted to the board. Requests for those submissions will be no earlier than 1 July 2012 and schemes will have a maximum period of 11 years until 2022 to finalise plans.
In order to ensure sustainability, enhance the security of member benefits and increase equity the government has confirmed that the funding standard will be reformed by ensuring that each DB pension scheme holds a risk reserve to protect against future volatility. In addition, it has been estimated that the provision of risk reserves will add a further 10 per cent to scheme funding requirements.
The Pension Board predicts that around 70 per cent of DB schemes are currently in deficit.
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