Members of the Irish League of Credit Unions (ILCU) have voted in favour of plugging the defined benefit (DB) pension deficit with €80.9m from an ILCU stabilisation fund.

At the annual general meeting in Belfast last weekend, members approved the use of the money from the ILCU Stabilisation Protection Scheme (SPS) to assist all member credit unions in meeting their current priorities and challenges, including the DB pension deficit.

The €80.9m fund will be apportioned proportionally across all 292-member credit unions. The announcement follows reports in January 2022, in which the ILCU hit back that the pension deficit would destabilise the credit union sector.

The ILCU slammed the reports as “completely out of context” and said the pension scheme is a separate legal entity to credit unions so there is no risk to the sector.

Addressing the situation today, the ILCU said the decision resolves an issue which has impacted 2,000 current and former credit union employees and the 130 individual credit unions. It follows the development of the pension deficit funding plan which is currently being implemented.

A new pension governance structure will also be implemented to provide for consistent and transparent information to participating credit unions concerning the performance and functioning of the pension scheme itself. These reforms will also provide for a new, independently chaired pension employer oversight body, encompassing external and qualified pension expertise.

Commenting, ILCU interim chief executive, David Malone, said: “The pension fund has existed for many years. At various stages over this time, including in more recent years, steps have been taken to seek to address the deficit issue, which has been a cause of concern for many credit unions. The complexity and operational structures of the pension fund came into sharp focus over recent months.

“We are pleased that following a comprehensive assessment of a number of options, we now have a resolution. Crucially, it preserves the benefits of those impacted, balancing this against the wider rights and considerations of credit unions, while ultimately drawing a line under this matter.”

The ILCU closed its DB pension scheme in March 2022, moving to a defined contribution scheme.

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