herald

Thursday 19 October 2017

Pensions: Pension cuts to be put on hold

HUNDREDS of thousands of Irish workers were today thrown a pensions lifeline after the Government said it would allow more time for the schemes to sort out their finances.

Up to 300,000 workers, who had been facing massive cuts in their pensions, will benefit from the reprieve.

Workers could now face smaller cuts than expected after the Government announced it plans to make technical changes which will make it less costly to provide company pensions.

Many of these pension schemes, known as defined benefit plans, were expected to seek permission from the Pensions Board to cut the pension to be paid to workers when they retire in order to balance the books.

Now the deadline for submitting funding plans is to be extended, for the third time.

Minister for Social Protection Eamon O Cuiv last night confirmed the November 30 deadline is being extended, however, he did not give a date for the new deadline. Pensions experts believe it will fall after July of next year.

The minister also promised to produce new legislation outlining what he called a new defined benefit model.

Schemes are now likely to be allowed to change the way their deficits are calculated, which would lessen the blow to workers' pension pots.

TheGovernment's new move comes amid a deepening crisis in private pensions, with three out of four company schemes in trouble.

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