IRELAND - Bank of Ireland's (BoI) pension deficit hit record negative levels at the end of 2009, when it reached €1.6bn (US$2.1bn), the bank's preliminary results for the nine months up to December 31 revealed.
The deficit has been worsening since March 2007 when it stood at €795m due to increased longevity of pensioners, lower interest rates, historically high wage inflation and subdued investment returns.
In a statement, BoI said: "There is recognition between the Bank and all relevant parties that this situation is not sustainable and that we must agree a shared solution to address the issue. We are making good progress in this matter."
In January, BoI appointed Brian Forrester, the former head of Bank of Ireland Life, to lead a review of the firm's defined benefit (DB) fund and look at ways to tackle its pension deficit, which at the time was valued €1.5bn.
At the time, the bank said discussions were taking place between representatives of staff and with pension trustees.
Spokeswoman Anne Matthews told GP: "We expect to go back to the relevant parties with proposals in the next couple of weeks."
BoI operates a number of DB and defined contribution schemes in Ireland and overseas. The most significant DB scheme in the BoI group is the Bank of Ireland Staff Pension Fund (BSPF) which accounts for about 81% of the pension liability on the consolidated group balance sheet.
The BSPF was closed to new members from October 1, 2006 with the exception of a number of new entry-level employees, who were offered the one-off option to join the scheme.
At the end of December, BoI's DB schemes had 54.8% invested in equities, 36.8% in debt securities, 6.8% in property and 1.6 in cash.
Jonathan Stapleton asks whether newly-accredited professional trustees should be a statutory fixture on pension scheme boards.
Savers are being warned by the Insolvency Service to guard their pension pots from investment scammers and negligent trustees as it winds up 24 companies.
Respondents say they should only be required in certain situations as the system is not broken.