The Social Welfare and Pensions Bill published today shed light on the long-delayed revision to the funding standard which was announced last year by Joan Burton, the Minister for Social Protection.
The Department for Social Protection said the changes would ensure pension funds could fulfil their pensions "promise" and aimed to improve scheme sustainability.
Burton added: "Many trustees and sponsors have been working to enhance the sustainability of their schemes and making difficult decisions in that regard. The re-introduction of the funding standard will require all schemes to examine their position closely, and it is hoped that the vast majority will be able to develop realistic proposals to rectify their funding positions."
Schemes will have until the beginning of 2016 to comply with the new risk buffer regulations. "The measure will allow pension schemes a long lead-in time to develop the required level of risk reserve", the department noted in its memorandum on the bill.
It added that the level of reserve would be "linked" to the level of investment risk undertaken by the scheme. Detailing the new funding regulations, the memorandum said the reserve would be the aggregate of two amounts – the first of which was 15 per cent of the funding standard liabilities, less the value of all European Union bonds and cash held.
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