The Government has announced a series of measures designed to support pension schemes at companies which have become insolvent.
The Pension Insolvency Payment Scheme, along with changes to the Pension Act, are to be finalised in the Oireachtas this week.
The scheme will be run by the National Treasury Management Agency.
It is thought that up to 90% of defined benefit pension schemes in the private sector are running a deficit - a gap that could be as large as €30 billion.
The scheme being announced today is an attempt to shore up pensions at companies which have run into trouble. The trustees of a scheme can now pay a sum to the Government which would cover the cost of paying the pensions of their retired members, instead of having to buy annuities from insurance companies.
It is hoped that this would lead to significant savings that could instead be put towards the pensions of those people who have yet to retire.
In addition, the Minister for Social and Family Affairs Mary Hanafin has announced proposed amendments to the Pension Act. The changes would ensure that pain is shared more equally among members of schemes that either need to be restructured or that are wound up with a deficit.
