Bank of Ireland aims to halve pension deficit

The Bank of Ireland has made changes to it 18,000 member-strong pension scheme in order to halve its €1.6bn deficit.

Under the plans, there will be no pension increases for future retirees for three years from their date of retirement, although this will be phased in for those close to retirement.

The bank is also planning to introduce a temporary freeze on any salary increases qualifying for employees’ eventual pension income until April 2012.

There will also be a maximum 4% cap on pension increases for existing pensioners and deferred members from 1 April 2012.

The bank, is making available additional funding of €750m to reduce the deficit over five years.

The defined benefit scheme will, however, be preserved and there would be no increase in member contributions.
The process of communicating the changes to members has already started and will last 12 weeks.

The bank has a joint financial services venture with the Post Office and corporate and global banking presence in mainland Britain, as well as a number of high street branches in Northern Ireland.

Read more stories on occupational pensions

Read more stories on occupational pensions