Ireland’s Pensions Board has published its annual report and accounts for last year, revealing that both defined benefit and defined contribution schemes registered with the Board fell over 2010.

The report revealed that the number of active registered defined benefit (DB) schemes fell from 1,307 to 1,108 during 2010. The number of active members in these schemes fell by 36,259 to 550,229.

On defined contribution (DC), the number of registered schemes reduced by 7,756 to 75,183, while total membership of the schemes fell by 7,177 to 259,732.

However, the last year saw an increase in the number of Personal Retirement Savings Accounts (PRSA) contracts - an investment vehicle used for long term retirement provision by employees, self employed, homemakers, carers, unemployed, or any other category of person.

The report showed that the number of PRSA contracts in force grew by 16,252 to 187,114, with total assets of €2.74 billion. The increase represents growth of €690 million since 2009.

Announcing the release of the report, The Pensions Board said the overall fall in scheme membership is of concern due to the importance of personal saving to provide for retirement in addition to the state pension.

The Pensions Board estimates that as at 31 December 2010, 75 per cent of DB schemes are in deficit and in many cases the deficit is substantial.

During 2009 and 2010, the Board granted a number of extensions to the statutory deadlines for submission of funding proposals. In mid-October 2010, the Board again deferred the deadline for the submission of funding recovery plans in response to the Government’s announcement of an acceleration of a review of all DB issues raised in the National Pensions Framework.

Pensions Board chief executive Brendan Kennedy said the suspension of the funding standard deadline is a “pragmatic” decision to allow schemes time to deal with their funding deficits, “it is the Board’s intention to set a revised date as quickly as possible.”

Kennedy said investment risk is “the greatest single issue” facing Irish schemes, and the Board is aware of specific schemes where trustees have taken steps to bring the investment risk into line with what the scheme can bear.

However, three years since the markets crashed, Kennedy said data both in the Board and elsewhere show “no noticeable reduction” by Irish schemes of their aggregate equity exposure.

“The unavoidable conclusion is that, in very many cases, trustees have not faced up to the issues, and are continuing to expose the benefits of their members to significant risks of further losses.

“The losses suffered by members of defined contribution arrangements are in most cases similar to those of defined benefit schemes, though they have usually received less attention. This makes it more important than ever that the trustees of defined contribution schemes fully discharge their responsibilities so that members’ pension savings are as well managed as possible.”


Access the full report here

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