This report in today's Irish Independent highlights the real problem for many thousands of people whose pensions will be insufficient to meet the financial needs of their retirement. There are various reasons for this some of which are analysed in the report. 

But there is another force currently attacking pensions in a much more direct and aggressive way: the vulture funds. Having bought loans from banks at huge discounts the vulture funds are trying to recover every last cent supposedly owed. Even if that includes trying to force borrowers to draw down their pension early and hand over lump-sum entitlements.

The law in relation to a vulture fund's entitlement to do so may vary depending on the individual circumstances. But there are certain characteristics of many pension funds that make it much more difficult for the vulture funds to seize their benefits including: 

  • Their establishment under an irrevocable Pension Trust Deed
  • Their administration by an Independent Pensioneer Trustee who has a veto over retirement age / payments etc.
  • Their establishment in accordance with the provisions of s.772 and s.774 of the TCA 
  • Where their Deeds provide for a prohibition on the assignment of the benefits from the pension funds
  • Where the Deeds ensure that the ultimate beneficiary has no current interest either legal or beneficial in the capital funds
  • Where the Deeds ensure that the ultimate beneficiary has no power to secure the payment of capital funds held under the irrevocable trust
  • Where the Deeds ensure that retirement age is some distance in the future

In any event a vulture fund has no right to access a pension at all unless it has already obtained a judgment against a borrower in court. Even then the process is fraught with danger. Not least because the law supporting a judgment creditor's right to access a pension is so uncertain.

If you are worried about the potential vulnerability of your pension then talk first to your pension provider. Then take any necessary legal advice in respect of your individual circumstances.