Fás pension fund deficit is €303m after slump in equities, says Minister

THE DEFICIT in the Fás pension fund is €303 million, Minister for Enterprise, Trade and Employment Mary Coughlan revealed.

She said that it was made up of a market value of fund assets of €328 million and liabilities of €631 million.

“We are all aware of difficulties in pension funds and it was on such a basis that the Department of Finance was asked to facilitate the transfer of pension funds of non-commercial State bodies to be administered by the National Pension Reserve Fund,’’ Ms Coughlan added.

“It would be the fund’s responsibility to administer and work through the pension’s deficit and the needs of that pension fund.’’

She said that legislation had been introduced to facilitate that and a transfer order was prepared.

“I recall signing an SI [statutory instrument] in regard to the closure of the spouses’ and children’s contributory pension scheme,’’ she added.

Fine Gael spokesman Denis Naughten said that many members of the public would be amazed to see a deficit of €303 million in the Fás pension fund at a time when its former chief executive got a pension benefit of €1.4 million in very questionable circumstances.

Ms Coughlan said that over 95 per cent of the non-commercial semi-State pensions were now operating on a pay-as-you-go basis, which was very significant.

“It is appropriate to say that we had separate pension schemes and funds, as well as separate actuarial staff and fund managers looking at this,’’ she added.

“The Government decided that the best way to address those costs, and centrally manage them, was under the National Pensions Reserve Fund.’’

Ms Coughlan said that the current deficit in the fund reflected the collapse in equity values over last year and the early part of this year.

This had led to a significant fall in the total market value of pension scheme assets.

“Whereas the present value of funded pension liabilities has also dropped over the same period, it has done so to a lesser extent,’’ she added.

“The asset figures have improved in the interim but remain subject to market fluctuations.”