IAPF expects Ireland to unveil new DB framework within weeks
IRELAND - Long-delayed reforms to the Irish defined benefit (DB) system will be unveiled before the upcoming election this spring, the Irish Association of Pension Funds (IAPF) has predicted.
Jerry Moriarty, director of policy at the IAPF also said it was unclear what exactly the changes to the DB framework - close to a year after they were first announced by the government - would entail.
Moriary said what had so far been suggested indicated a "middle ground" between DB and defined contribution (DC), giving employers who want to launch a new scheme "a little bit more choice than just going for traditional DC".
He also said several issues pointed toward the new guidelines being announced soon, including the suspension of the funding standard by the Pensions Board while government deliberated.
The upcoming election, prompted by the junior coalition partners following Ireland's bailout agreement with the European Union and the IMF, was also reason for urgency.
"Certainly, in terms of announcing what the policy is, that's going to happen in the next couple of weeks," Moriarty said. "Getting legislation through parliament would be more challenging. It's not clear at this stage what legislation would be required - whether it's just tweaking what is there already or whether its's something more substantial than that.
"What they are trying to do is catch some of the benefits of DC, such as the sharing of risk and the collective investment approach that goes into DB with some of the certainties you get with DC around contribution levels, which is obviously quite important to employers."
Moriarty also said the regulations would be likely to improve the situation for employers considering the closure of their DB schemes.
Reforms to the DB framework were first announced as part of the National Pensions Framework in March last year after more than two years of consultation.
Additional reform suggestions included the launch of an auto-enrolment system in 2014, with the caveat that the introduction of any such legislation would depend on the economic climate at the time.
Due to the increased costs for employers, the timetable has now been thrown into doubt.