The Society of Actuaries in Ireland has stressed that it is vital that the ambitious deadline set for the potentially far-reaching review of defined benefit pension schemes announced recently by Minister Ó Cuív is delivered upon and a new protection system is put in place promptly.
A fundamental review of the defined benefit pension system is long overdue, and is of critical importance if confidence is to be restored to a supervisory system that, despite frequent study and analysis, has changed little since it was first introduced 20 years ago. Radical steps will be required to address the funding crisis faced by trustees and sponsors in the current difficult economic environment.
However, the inevitable uncertainty created by this review, coupled with the deferral of the Funding Proposal deadline, could impact negatively on the security of members’ benefits. In this regard, we propose that the compulsory disclosure of information in annual benefit statements should be expanded as a matter of urgency to include information on security of benefits in the event of a scheme wind-up.