Ireland - Three quarters of Ireland's defined-benefit pension plans were in deficit at the end of 2009, the Pensions Board has said.
Its annual report reveals about 75% of DB schemes were in deficit at the end of the year, with the shortfall in many cases "substantial" .
Chief executive Brendan Kennedy said although investment returns for the year provided some relief for scheme members, there were concerns about how these returns were achieved. He said Pensions Board data showed the level of investment risk being taken was still "very high". Irish pension schemes suffered serious losses between 2007 and early 2009 because of the substantial investment risks being taken, he added.
"The lessons of the past are clearly still not being applied today; investment strategies must focus on the risk as well as the return," Kennedy said. "And the situation with defined contribution schemes is similar: there is very little risk reduction in the funds in which many members are invested.
"Recent stock market losses show the ongoing risks of this approach. It is difficult to avoid the conclusion that the good investment returns of 2009 are a result of the same strategies that caused much of the recent losses, and that the chances of further losses are therefore too high.
"While under the Act, the Pensions Board does not have the power to specifically direct pension investment the Board continues to warn against this approach."
Assessing the work of the Pensions Board over the last five years before its term comes to an end in December 2010, chairman Tiarnan O Mahoney said the Board had overseen the introduction of a risk-based supervisory approach to pensions' regulation and key innovations, facilitated by legislative change, including the introduction of an on-the-spot fine regime, the introduction of regulation of scheme administration and the introduction of compulsory trustee training.
The Board will increase the focus of their supervision of registered administrators over the coming months and years, he said.
He added: "I have previously highlighted the Board's grave concerns about instances of deduction, but non-remittance, of employee pension contributions under the Construction Workers Pension Scheme.
"The Board regards this misappropriation of employees' monies most seriously and we continue to pursue these cases as a matter of priority with a focus on restoring the monies to the scheme. Where compliance fails to happen, the Board moves to take criminal prosecutions."
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