Pensions: Changes Introduced to Defined Benefit Schemes, Winter 2011


The Minister for Social Protection, Joan Burton, has announced changes to defined benefit pension provision. First, the existing statutory minimum funding standard (the “MFS”) will be re-instated for a transitional period of three years, although the MFS will be amended to permit the purchase of sovereign annuities. Secondly, schemes failing the MFS from 2012 onwards will be required to hold a risk reserve as a protection against future volatility in the financial markets. The exact detail has yet to be established but it appears that schemes will be required to meet the new funding standard by 2022.

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