Universities Set to Improve Pensions

By Dominic Coyle, The Irish Times

August 27, 2008

Ireland

Universities are expected to take advantage of Government plans to acquire their pension fund assets to significantly improve the pension position of some staff.

The Government has indicated it intends to take the assets of a large number of independently funded semi-State pension schemes - including those at most of the universities - into the exchequer. This will provide the Government with a windfall of up to €4 billion, according to sources within the pension industry.

While most university staff are members of defined-benefit pension schemes where they receive a guaranteed pension based on the number of years served, a number of colleges - including UCC and UCD - are understood to also operate less advantageous defined-contribution schemes for more recent staff.

It is understood that at least one university has moved to transfer members from the defined-contribution scheme to the more beneficial defined-benefit scheme ahead of any asset transfer to the exchequer.

The action is likely to upset private-sector employers. The stock market downturn has meant many firms have funding shortfalls in their pension schemes. Tighter economic circumstances also mean they are less able to offset those losses.

The issue is likely to be discussed as the executive council of employers' lobby Ibec meets today for the first time since the summer break. A Bill that would allow the transfer of pension fund assets is due to be completed next month, before going to Cabinet.

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