PIPS is being introduced by the Minister in consultation with the Minister for Social and Family Affairs, Mary Hanafin. The purpose of the new scheme is to give a better return to those pension funds in deficit where the employer has also become insolvent. This will help to safeguard the entitlements of existing pensioners and lessen the blow for those yet to

retire. It is aimed at pension scheme members who have no other recourse to funding because their employer is insolvent and their scheme is in deficit.

The PIPS scheme works by the Government, through the NTMA, making available an investment facility that links the return on the pension fund's investment to the 10 year rate on fully secured Government bonds. This provides a better return than might otherwise be the case for the pension fund in question.

 

Introducing PIPS, Minister Lenihan said "I am pleased to note that there has been a significant recovery in Irish pension scheme assets during 2009; however, there is still a need to support schemes that are facing the twofold problem of a deficit and employer insolvency. PIPS provides an innovative yet straight forward response which supports pension scheme members without exposing the taxpayer to unreasonable risks".