Changes sought to Irish pension legislation

DUBLIN - Major changes in pension legislation are being sought by the industry to offset the effect of current low interest rates and their impact on the increased cost of buying annuities, which has risen by about 30% due to the falling interest rates. Annuities are based on fixed interest rates and when long-term rates are low the value for money is low. According to industry sources, radical action is needed and could involve changes in the regulations governing the purchase of annuities. While workers on defined benefit pensions will not be affected by the rate cuts in Ireland, their employers may have problems as a larger fund will be needed to provide pensions due to the increased cost of annuities.