Wednesday, October 23 12:27:01
Bank of Ireland today said it has agreed a potential solution with the IBOA to its near E1bn pension deficit crisis that involves matching benefit cuts with an equal cash injection in to the fund by the bank.
The largest sponsored defined benefit pension scheme, with around 80pc of the liabilities of all of the sponsored defined benefit schemes, is the Bank Staff Pensions Fund (BSPF).
Facilitated by the Labour Relations Commission, a shared solution to address the IAS 19 deficit in the BSPF has been agreed by the Bank and supported by the Irish Bank Officials Association, the bank said in a statement.
The solution involves the employee members of the BSPF agreeing to some changes to potential benefits, primarily with respect to how potential future salary increases qualify for pension.
It is also proposed that there will be changes to how increases to pensions in payment will arise.
Should such agreement from employee members be forthcoming and the proposals be implemented, the Bank will increase its support for the BSPF, above existing support arrangements, so as to broadly match the IAS 19 deficit reductions arising from changes to potential benefits, it said.
It is also intended, subject to consultation with the BSPF's Trustees, that there will be reductions in the proportion of the BSPF's assets that are invested in return seeking assets.
Once fully implemented, the adjustment to potential benefits would reduce the IAS 19 deficit in the BSPF by approximately E400m and would be income positive for the Group, Bank of Ireland said.