IRELAND - Irish Pension Board chief executive Brendan Kennedy has put out a call to pension fund trustees and sponsoring companies to stop focusing on trying to lower contributions and produce funding proposals that are sustainable over the long term.
He added: "It is not appropriate for trustees to focus solely on minimising contributions and satisfying the funding standard: a scheme needs to be sustainable for the long term, and trustees must therefore consider realistic costs, investment risks, and the ability and willingness of the employer to support the scheme."
Kennedy also said: "As highlighted in previous years, the Board is concerned that the investment and funding of too many defined benefit schemes are based on aggressive investment return assumptions and do not take enough account of investment risks and downsides."
He also said: "Defined benefit scheme funding must be based on realistic assessments of investment returns and of life expectancy.
Kennedy pointed out the experience of 2008 was worse than it could have been.
He said: "Too many schemes did not take account of the investment risks they were running in 2008. Too often it seems that schemes' primary goal is to keep contributions to a minimum and they give little or no thought to risk."
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