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Pension Funds

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This chapter looks at the pension funds sector (S.129) which consists of all financial corporations and quasi-corporations which are principally engaged in financial intermediation as the consequence of the pooling of social risks and needs of the insured persons (social insurance). Pension funds as social insurance schemes provide income in retirement and often benefits for death and disability.

The following data and analysis is taken from the Estimates of Irish Pension Liabilities 2015 which was published in April 2018. This is the most recent published data available for pension liabilities. This Estimates of Irish Pension Liabilities publication will be repeated every three years with the most current data available at the time. Estimates of 2018 Pension Liabilities will be produced in 2021.

Pension Fund Liabilities (% GDP)
Ireland (% GNI*)268.234802282117
Belgium 289.913832782899

Note: Figure 8.1 includes the pension liabilities of schemes managed by government and private occupational schemes. The former are not included in the National Accounts.

Source publication: Estimates of Irish Pension Liabilities 2015

Get the data: Eurostat

Ireland’s total liability at the end of 2015 equates to 166% of GDP (268% of modified GNI). Ireland's total pension liability is low in comparison to other EU countries due to Ireland’s relatively young population.

Breakdown of Private Pension Liabilities in S.129

Occupational Defined Contribution SchemesOccupational Defined Benefit Schemes
Opening Balance Sheet 201528.67901180259.082771801
Closing Balance Sheet 201532.15671300858.643457782

Source publication: Estimates of Irish Pension Liabilities 2015

Get the data: StatBank

The liabilities of Irish pension funds are largely made up of unfunded pension schemes like defined benefit schemes for government employees or social security contributions. In 2015, these government managed pension schemes accounted for €345.5bn of total Irish pension liabilities. These schemes are not a part of the financial sector (S.12).

Liabilities of private pension funds, which are classified in the financial sector, comprised only 21% of the overall liability in 2015. These non-government workplace pension schemes can be broken down into defined contribution and defined benefit schemes. Defined contribution schemes comprised 35% (€32.2bn) of financial sector’s pension funds liabilities, while defined benefit schemes comprised 65% (€58.6bn). The overall liabilities of pension funds shown in the financial sector in 2015 was €90.8bn.

Figure 8.2 shows the total changes in pension liabilities during 2015 classified by types of pension funds. During the year, the value of occupational defined contribution scheme liabilities grew from €28.7bn to €32.2bn, an increase of 12%. This was mainly driven by social contributions and market price changes which are reflected in Figure 8.3.

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Social ContributionsPayment of Pension BenefitsTransfers between SchemesNegotiated Changes in Scheme StructureRevaluations
Occupational Defined Contribution Schemes2.55359422359663-1.055347770.42703267701.55242207540337
Occupational Defined Benefit Schemes2.274344885-2.042419488-0.523032677-0.1482067390

Source publication: Estimates of Irish Pension Liabilities 2015

Figure 8.3 shows the overall changes in the pension entitlements. Flows in the two schemes are mainly driven by social contributions (€4.8bn) and paid benefits (€3.1bn).

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