IRELAND - Four out of five defined benefit (DB) schemes are in deficit despite good investment returns last year, the 2009 Annual Review by Ireland's Pensions Board revealed.
The watchdog chief executive Brendan Kennedy pointed a finger at trustees saying it was their actions that would have the biggest impact on the health of the scheme.
He said: "What determines whether a pension scheme can meet its obligations is not regulation, not the funding standard, but the prudent management of that scheme by its trustees and the support of the sponsoring employer on an ongoing basis. It is vital that the promises made to scheme members are realistic and deliverable."
He also expressed concerns on the approach to funding and investment of DB schemes. Too many final salary funds would be based "on aggressive investment return assumptions and do not take enough account of investment risks and downsides," according to Kennedy.
"DB scheme funding 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," he added.
Last year Irish occupation schemes saw an increase of 4,189 members. The vast majority are enrolled in DB schemes (586,448 members), as opposed to 266,909 members in DC schemes.
The Board received report of 169 suspected cases of deduction and non-remittance of pension contributions by employers in the construction sector in 2009. (Global Pensions, December 25, 2009)
As a result, the watchdog carried out nine on site investigations and 94 cases were closed. Over €4bn (US$5.5bn) in contributions was restored from the cases closed.
The Pensions and Lifetime Savings Association (PLSA) has announced it will shrink its board by more than one-third as part of a governance overhaul to make it "agile and more appropriate".
Smaller FTSE 350 defined benefit (DB) schemes were nearly 15 percentage points less well-funded than larger schemes in 2017, according to a Goldman Sachs Asset Management (GSAM) analysis.
The advent of collective pension systems could help the UK avoid demographic challenges which will make it "impossible" for society to help savers in retirement, experts say.