Back To The Future For Pensions

Author:Ms Peggy Hughes and Stephen Gillick
Profession:Mason Hayes & Curran
 
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2016 was a mixed bag with little change for pensions in Ireland. We outline how early markers indicate that 2017 is more likely to bring considerable discussion with possible movement and change, with potential for tangible impact in a number of key areas.

The big issues for consideration will include the ongoing implications for defined benefit scheme funding on the back of a protracted low bond yield environment and swings brought about by the prospect of Brexit. These may settle as the reality of precisely what Brexit means begins to take shape and the implications become clearer. It is very likely that policy changes under the new Trump administration in the United States will also have an impact on markets.   

Back home, the Minister for Social Protection, Leo Varadkar, has indicated that he is determined to grasp the nettle of pension's coverage in Ireland and has indicated his aim of creating a universal pension scheme.  During the latter part of 2016, the Pensions Authority commenced a consultation process with all pensions' stakeholders. The purpose was to review current pension provision and seek input on a number of proposals for the future of pensions in Ireland. It is expected that the outcome of the consultation will be available in early 2017. Among the issues on which views were sought were experience and qualification requirements for pension trustees, an authorisation process and closer supervision of pension schemes, and rationalising of pension scheme numbers.

Media reports during December 2016 and early 2017 flagged a number of areas for possible pensions activity and potential change. In particular, the announcement of Independent News & Media's intention to cease contributing to its defined benefit scheme and certain reports exploring the impact of discussions on public sector pay of the value of public sector pensions were greeted with considerable negative media attention. There was also a suggestion that striking members of An Garda Síochána should not accrue pension entitlements. Since the New Year began, Minister Varadkar is widely reported to have identified possible changes in relation to compulsory retirement ages and plans to offer larger State pensions to those who work longer. Labour Party TD, Willie Penrose, has drafted a bill to amend the Pensions Act in relation to the winding up of an underfunded defined benefit pension scheme by a solvent employer. We understand the plan was to introduce the bill when...

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