DB eclipsed in new Irish plans
Almost 100% of the 9,607 new pension schemes registered with the Irish Pensions Board during 1998 were defined contribution (DC) plans, with the number of defined benefit (DB) plans continuing to fall, showing a net decrease of almost 250 schemes over the year.
The board’s increased monitoring of compliance with DB funding standards has been cited as the main reason for the drop. During 1998, of the 2,071 DB schemes subject to 1990’s pensions act – requiring full funding for all post 1991 pension rights – 339 cases of non-compliance were discovered, compared to 113 in 1997, a figure which the board noted as “clearly unsatisfactory”.
By the end of 1998 compliance had been achieved in 281 of the defaulting schemes with 37 remaining outstanding. Overall, however, the number of schemes having submitted actuarial funding certificates stood at 89%, covering 97% of total fund membership.
The pensions act also stipulates that these DB plans are fully funded for all pension rights pre 1991 by January 1, 2001. And, arising from general enquiries and complaints over trustee compliance to the Pensions Act, 189 investigations were carried out, compared to 163 the previous year.
One case involving the compulsory and voluntary reporting provision brought into the law in 1996 has been referred to the Garda Irish police bureau of fraud investigation.
During the remainder of its term until the end of the year the pensions board has said it will place a major emphasis on its regulatory role, including the examination of new methods of compliance monitoring and penalty imposition in cases of failure.
Although the ratio of DB to DC schemes is dropping in Ireland, DB plans with 207,413 members still account for almost twice the total 120, 580 active DC scheme members. The figure rises to three and a half to one if members of DB public sector schemes not subject to the Pensions Act funding standard are included.