AIB Non contributory defined benefit pensions

[tosh100]

Was amazed to read the other day that pre 1998 AIB employees benefit from a non contributory defined benefit pension! Given the NAMA bailout and the imminent nationalisation of AIB does anyone think that the Public Sector Pension Levy could be applied to AIB employees?

 

[LDFerguson]

Not as it stands, as this levy only applies to public sector employees. A lot of private sector employers operated non-contributory Defined Benefit schemes in the past.

I can see some merit in an argument in favour of some form of levy on provate sector employees in DB schemes, but the levy would have to take into account (a) if the private scheme is actually solvent, (b) how the benefits compare with the public sector superannuation schemes and (c) the fact that few if any private sector schemes increase pensions at the rate of increase in workers' pay.

 

[homebird]

The sickening thing is that many of the managers who made the decisions regarding credit and lending over the past decade are now being retired on these cushy, guaranteed pensions. The pensions are based on huge salaries. Many of them are relatively young and will live to enjoy the benefits. Will we, as taxpayers, ultimately be footing the bill?

When some of the bank CEO's finally took pay cuts, it is probable that their pension was based on the higher amount.

 

[DerKaiser]

I read the article about that alright. (http://www.independent.ie/business/...n-bid-to-tackle--pension-deficit-2004628.html)

The changes being proposed seem very mild to me compared to the general type of reductions in benefits on DB schemes. This is all the more interesting when you consider that in general other companies reducing their DB entitlements will not be in as poor financial shape as AIB.

The main point as I see it is that they are using an average of the final five years salary with a minimum of 87.5% of final salary. This is a serious cop out. Applying a career average with no minimum would be a lot harsher, in line with what other companies are doing and more befitting of an organisation in dire financial straits.