IRELAND - The Bank of Ireland's defined benefit (DB) pension deficit has almost doubled over the last year to €1.48bn.

Preliminary final year figures from the Bank revealed the 2007 triennial valuation of the Bank of Ireland Staff Pension Fund (BSPF), which accounts for 82% of the total pension liabilities, showed the fair value of the scheme assets represented 109% of the benefits accrued by members.

The next valuation is scheduled for 31 March 2010, however the latest data showed the updated valuation to March 2009, for IAS19 purposes, showed the net deficit of €795m in 2008 had almost doubled to €1.478bn a year later.

Figures revealed the total market value of the DB assets, which includes the DB element of the hybrid Bank of Ireland Group Pension Fund (BIGPF), dropped over €900m from €3.97bn to €3bn, although the liabilities also declined by almost €300m from €4.75bn to €4.47bn.

The value of the DB pension schemes' equity portfolio also dropped significantly over the year from €2.38bn to €1.45bn, as the report noted the DB scheme assets include Bank of Ireland stock amounting to €1m, compared to €29m in 2008.

Property holdings also decreased in value from €460m in March 2008 to €285m a year later, although the value of debt securities increased by around €160m from €1.05bn to €1.21bn, as the report noted around 66% of the value of the debt securities is held in a liability-driven investment (LDI) portfolio.

That said, the banking group, which received a €3.5bn cash injection from the National Pension Reserve Fund (NPRF) as part of the government's recapitalisation scheme, noted the liability to its defined contribution (DC) schemes reduced over the year from €1m in 2008 to just €600m.

If you have any comments you would like to add to this or any other story, contact Nyree Stewart on + 44 (0)20 7261 4618 or email nyree.stewart@ipe.com

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