Changes needed to protect the future of DB pensi in Ireland

Defined Benefit Pension Schemes have been facing some serious financial challenges. The solvency test, introduced through the Pensions Act and which checks if a scheme was to wind-up, whether the assets would meet the scheme’s liabilities, has become a high hurdle. In addition, schemes have been hit by several years of poor investment performance, which has heightened the impact of other problems they face. The high solvency hurdle has caused many employers to reconsider whether they can continue to finance their defined benefit pension schemes. Approximately 232,000 Irish people are members of defined benefit pension schemes and Mercer believes that a revised solvency test is urgently needed.

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