Statement from ILCU regarding reports in the national media

Posted on: 28 Jan 2022

Following reporting in some national media outlets this morning regarding changes in the Irish League of Credit Unions’ Republic of Ireland (ROI) Defined Benefit (DB) Pension Scheme, we wish to state the following;

• The reports in some national media outlets today are completely out of context.

• The pension scheme is a separate legal entity to credit unions. The scheme is managed by trustees and pension scheme funds are legally separate to members’ funds. Therefore, there is no question of the credit union sector being destabilised.

• The Irish League of Credit Unions identified that the cost of financing pensions was increasing and commissioned an independent review of the scheme.

• The purpose behind the review was, first and foremost, to ensure that there is sustainable pension scheme funding arrangements to protect the pension benefits that have already built up.

• The recommendation of the independent review was to close the current ROI DB scheme going forward.

• During the review, the League considered the impact on each individual credit union, and we have also been proactively engaging with the Central Bank about the decision.  

• The Irish League of Credit Unions is not unique in moving from a defined benefit scheme to a defined contribution scheme. In the past decade, there have been significant reductions in the number of defined benefit schemes in Ireland. Almost half of employers who still provide defined benefit schemes have made the decision to cease to future accrual.

• The Irish League of Credit Unions has engaged fully with all participating ROI credit unions and will be providing support and assistance over the coming weeks as they migrate to a new Defined Contribution scheme.