The equity exposure of Irish defined benefit (DB) schemes has decreased by more than 50 per cent over the past decade, new statistics published by the Pensions Authority have revealed.

According to the Pensions Authority’s latest data, based on DB Annual Actuarial Data Returns (AADR), DB schemes had 37.9 per cent allocated to equities in 2014, but for 2024 this stood at 17.3 per cent.

On the other hand, schemes’ exposure to ‘other’ assets has almost doubled in the same 10-year period, rising from a 15.3 per cent allocation in 2014 to a 28.2 per cent allocation in 2024.

The authority described the 'other' category as private equity, liability-driven investment, absolute return funds, diversified growth funds, alternatives including infrastructure, secure income, hedge funds, commodities, derivatives and annuities.

Exposure to European Union member state bonds has remained largely the same over the past decade; in 2014, the figure was 32.6 per cent, which increased to 35.6 per cent in 2024. Allocation to ‘other’ bonds has also increased from 7.2 per cent to 11.2 per cent for the same period.

Furthermore, allocation to cash and property has remained consistently low, at 4.1 per cent and 3.5 per cent, respectively, for 2024, and 2.8 per cent and 4.1 per cent in 2014.

The 2024 summary is based on 452 AADRs, compared to 715 a decade ago. The Irish market has seen substantial consolidation of schemes in recent years, driven by the implementation of the IORP II Directive and the authority’s goal to decrease the number of schemes in the sector.

Of the 452 AADRs submitted by schemes for 2024, 275 were classified as current, 166 were frozen, and 11 were classed as in wind-up.

Schemes are categorised as current when active members continue to accrue benefits, or frozen, where benefits are provided only for members whose service has ended and no new accrual or admissions occur (with schemes closed to new members but retaining a final-salary link still treated as ‘current’ until that link is broken).

Finally, schemes are classed as in wind-up, when a decision to wind up has been made but the process is not yet complete, and some liabilities and assets remain.

In total, there were 293,288 DB members in 2024 (111,225 - pensioners, 63,123 – active, 118,940 - deferred) compared to 362,967 in 2014 (90,899 – pensioners, 122,226 – active, 149,842 – deferred).

In terms of funding, in 2024, liabilities stood at €49.6bn, while assets amounted to €65.9bn. This is a much healthier funding position than compared to a decade ago, when liabilities stood at €61.2bn, and assets totalled €56.4bn.

Indeed, the number of schemes that did not meet the funding standard in 2024 was just five, considerably lower than the 361 recorded in 2014.

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