The Minister for Social and Family Affairs Mary Hanafin said today the Government is working with pension funds to ensure they can meet their liabilities.
Ms Hanafin said when funds say they cannot meet their obligations they are given a period of time, now extended to 18 months, to set out proposals for restructuring over a three-year, or in certain circumstances ten-year, time-span .
Ms Hanafin was responding to the leaking of a confidential memo she sent to Cabinet colleagues about the dangerous state of pension funds affecting hundreds of thousands of workers.
"This time last year 80% of Irish funds indicated they had sufficient money to meet the requirements of pensioners if their companies went bust. We do expect funds to be in difficulty this year because of the markets,” she said.
“No matter what happens to their private pension people have their State pension to fall back on. Most of these people would have been paying PRSI and so would have the State pension of €230 a week,” she said.
“It’s not as if someone would be left with nothing,” she added. Ms Hanafin was speaking on RTE’s News at One radio programme this afternoon.
The Minister said private pension funds were by their nature risky as they were subject to the volatility of the markets.
“All pension funds are very dependent on the market because they are, in essence, investment funds and we know worldwide those markets are in difficulty – so the money that was in those funds last year is not the same as the money in them this year,” she said.
“The markets are in a bad situation. But they’re picking up. Funds might be able to reinvest. This difficult time came on us quickly, we might come out of it just as quickly,” she said.
She said an investigation into how the confidential memo was leaked to Sunday newspaper had been launched.