November 2013        

Pension benefits wiped

Part 2

In the September issue I described how a combination of an ESB accountancy fiction, Government (owner) dividend demands in excess of €600 million and pension regulations that give total favour to retired pension-scheme members over today’s workers have affected the ESB pension scheme.
     In summary, less than half the scheme’s members have been left carrying the entire risk in the largest funded pension scheme in the state, while employer and owner abandon them to certain and impending pensions disaster. According to the state’s own regulations, the majority of those workers now have 3 per cent of their pension entitlement with no state pension entitlement.
     Their representative trade unions (ESU, SIPTU, TEEU and Unite) coalesce through the ESB Group of Unions. The group has a strategy, which we refer to as the “three-legged stool approach,” of addressing this issue through political, legal and industrial campaigns.
     Politically it is clear that the Government—the 95 per cent owner of the ESB—has a serious culpability for this crisis. The statutory pension scheme has been controlled by a Government minister since its inception, and many of the liabilities of the scheme can be traced back to this control. In addition, Government regulation and dividend demands have contributed to the current funding crisis.
     For a year and a half the group have been active, formally and informally, with key ministers and their officials. We have highlighted how the policy of one arm of Government (one example being the minister for finance’s introduction of a pension levy of pension funds, taking €80 million out of this scheme) is at odds with the expectation of another arm of the same department, Public Expenditure. This department wants the company to be stripped of €600 million in assets that are needed to underpin the scheme.
     Meanwhile another department’s regulations and legislation, the Department of Social Protection, tightens the noose on the scheme and the workers in it, while the Department of Communications and Energy requires those workers to continue to deliver major infrastructure in the industry, not to mention “industrial peace.”
     The unions have initiated a demand, since joined by the ESB management itself, for exemption from the minimum funding standard, and ESB staff and officials continue to write to and lobby their elected representatives and senators about their plight.
     As the campaign to protect workers’ pensions gathers pace, Dáil Éireann and Seanad Éireann will become key locations for the ensuing debate. On the legal front, four trade union members of the scheme have initiated court proceedings sponsored by their respective unions.
[Brendan Ogle]

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