IRELAND - The €2.4bn Electricity Supply Board (ESB) pension scheme has a deficit of almost €2bn following the collapse of investment markets in 2008.

Figures from the latest actuarial valuation of the scheme showed at 31 December 2008 the scheme had assets of around €2.4bn, but the projected deficit had increased in value to €1.957bn.

ESB, which is 95%-owned by the government, claimed the fall in value is "in line with that of other Irish pension funds in 2008", as said "the scale of the deficit presented does not come as a surprise" following the 38% drop in equity markets and the current global recession.

Despite the expected increase in the pension liabilities, ESB confirmed the deficit "does require remedial action" and stated the 6,850 workers currently contributing to the fund had been informed of the valuation and deficit.

The company said it had been reviewing pension issues with the union groups before the result of the valuation had been published, and following the confirmation of the deficit both groups "are fully committed to working together to develop a resolution to this issue".

ESB added that both the trustees of the scheme and the superannuation committee would be consulted on any proposed solutions, while members of the fund would receive further information on development in the next few days.

Figures from ESB's last annual report showed at the end of December 2007 the pension fund had assets of around €3.8bn and liabilities of just over €5bn resulting in a deficit of around €1.35bn, while its investment strategy comprised a 74% allocation to equities, 8% in bonds, 13% in real estate and the remaining 5% in cash and other assets.

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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