THE number of defined contribution pension schemes is rising, but more than 80 per cent are still the traditional defined benefit type, according to a new survey.
The 1996 benefits survey, published yesterday by the Irish Association of Pension Funds (IAPF), shows that defined contributions schemes, with set contributions but no guaranteed return, represent 12 per cent of schemes, up from 6 per cent in 1994.
However, many of the defined contribution schemes are small, with less than 10 members. The survey shows that 84 per cent of schemes are traditional defined benefit schemes - guaranteeing a certain proportion of income on retirement - while the remaining 4 per cent of schemes are "hybrid schemes, not fitting directly into either category.
The survey show that 64 per cent of members contribute to their pension schemes, while the average rate of pensionable salary paid by members is 4.8 per cent. A fixed rate of contribution applies in 29 per cent of contributory schemes. Nine out of 10 schemes now provide a disability or income continuance plan or ill health retirement benefits.
The survey shows increased pension cover for spouses of employees, with 79 per cent of schemes providing a 50 per cent spouse's pension on the death of a member after retirement. The number of schemes providing no spouse's pension on the death of a member has fallen from 19 per cent in 1991 to 9 per cent in 1996. The survey shows that 72 per cent of schemes also provide 50 per cent of the prospective pension to a spouse if death occurs before retirement.
The figures show that 42 per cent of schemes provide automatic increases in pensions, while another 42 per cent provide increases at the discretion of trustees.
