Bank of Ireland reviews DB scheme over €1.5bn deficit
IRELAND - The Bank of Ireland (BOI) - one of two banks benefiting from the recapitalisation by the National Pension Reserve Fund (NPRF) - has confirmed it is in the early stages of a review of its defined benefit (DB) pension scheme.
The Bank of Ireland Staff Pension Fund (BSPF) has a deficit of around €1.5bn and assets of around €3bn, so officials have initiated a comprehensive review regarding the options for the pension, acording to a spokeswoman.
The review will only apply to the DB scheme, which closed to new members in 2006, while the company's defined contribution (DC) plan and hybrid 'Lifebalance' scheme remain unaffected by the move.
It is unclear how long the review will last as the bank plans to communicate with members and trade unions over the coming weeks.
The Irish Bank Officials Association (IBOA) has confirmed BOI had already been in contact. But while the union recognises the need for employers to continually review DB arrangements, it has appointed an independent actuary and "requested complete and detailed information from the bank for analysis by our experts before any discussions take place".
The Bank of Ireland received €3.5bn from the NPRF last year as part of a recapitalisation programme established by the government. A similar amount was also invested in Allied Irish Banks (AIB), which has also been in discussions with trade unions about changes to its pension scheme, as the plan had an aggregate deficit of €1.26bn in June 2009.
AIB has proposed introducing a mandatory 5% employee contribution for staff who are not already paying into the DB scheme along with changes to the benefit structure - all of which have been opposed by the trade unions, including IBOA. (See earlier IPE article: AIB aggregate deficit exceeds €1.2bn)
Further insight into how the recapitalisation programme affected the NPRF's operation can be found in the February issue of IPE.
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