Most Irish DB plans underfunded - Mercer
IRELAND - Over two thirds of defined benefit plans in Ireland fail to meet long term fully funded status, a Mercer Investment Consulting survey has found.
Mercer said those findings came despite the strong equity market performance over the past three years. Tom Geraghty, head of Mercer IC in Ireland, added that Irish pension fund trustees continued to struggle with the long term financial well-being of their pension plans.
“While assets have performed well, pension fund liabilities have continued to rise at a faster pace than expected due to declining long term bond yields, enhanced mortality conditions and a strong salary growth environment in the local market.”
The survey of 150 organisations also stated that roughly half of respondents believed attempting to better match pension liabilities was "a key priority".
Among the other key findings, 66% of respondents stated the major barrier to increasing their allocation to alternative assets was a lack of knowledge in this area.
“Much needs to be done in this area in terms of education for trustees and sponsors as well as the provision of institutional friendly products for pension funds," said Geraghty.
"Having said this, the number of these types of funds is increasing all the time and many are now accessible to smaller and medium sized pension funds.”
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