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CIÉ Pension Scheme Committee Wants High Court To Rule On Moves To Secure Solvency

Published on Oct 14 2021 10:27 AM in General Industry tagged: Trending Posts / CIE

CIÉ Pension Scheme Committee Wants High Court To Rule On Moves To Secure Solvency

Members of the committee of one of the two principal CIÉ pension schemes want the High Court to determine whether moves by CIÉ to secure the solvency of the scheme is compatible with reductions in benefits to members.

As reported by The Irish Times, the superannuation scheme covers principally supervisory, technical, administrative and managerial staff, and the proposed changes include increasing the minimum retirement age from 60 to 63.

The scheme was reportedly set up in 1951, and reportedly was fully funded to the relevant statutory standard until 2008 when it was in deficit. A funding proposal was reportedly devised after that, but it was reportedly off track again by 2017.

The scheme’s funding deficit was reportedly €151 million as of December of 2020.

The Pensions Authority reportedly told the scheme’s trustees and pensions committee that it was considering using a provision under law to reduce benefits under the scheme because of the solvency position or to wind it up.

Negotiations reportedly followed between CIÉ and the group of trade unions in the company, and the Labour Court reportedly ultimately issued a recommendation that member benefit reductions should be achieved by increasing the pension age. The unions reportedly voted to accept it by 54% to 46%.

The CIÉ board reportedly informed the pension committee that it had notified the Minister for Transport and the Pensions Authority that it had commenced a statutory process to implement changes to the scheme to bring it in compliance with minimum funding standard requirements of the Pensions Act 1990 and that, therefore, a funding proposal would not be required.

The committee reportedly says, however, that no draft amending scheme was attached, that the committee is not clear what changes CIÉ is proposing to make, and that no such amendments have been published or provided to the committee to date.

Committee Stance

The committee reportedly believes that any proposal to reduce member benefits is incompatible with CIÉ's obligations under the scheme's rules, and reportedly has asked the High Court to determine whether the obligation under rule 20 of the 1951 scheme, to maintain and support its solvency, satisfies the statutory funding standard, and reportedly also wants a ruling on whether there is an obligation under the rule to support the scheme in accordance with the Labour Court recommendation.

CIÉ Stance

CIÉ reportedly says, among other things, that the committee's motivation in bringing the legal proceedings is due to a perceived failure by the Pensions Authority to offer what it says is "comfort" to the committee and to persuade the authority against exercising its powers under the Pensions Act.

CIÉ reportedly believes that the benefits available to members will remain generous by reference to corresponding benefits in other public-sector schemes.

CIÉ group human resources and organisational development head Aidan Grogan reportedly pointed in an affidavit to schemes in companies such as An Post, Bord Gáis, RTÉ, the Dublin Airport Authority and Bord na Móna. Most have reportedly introduced defined-benefit pension schemes with even higher retirement ages.

Grogan reportedly said that the proposed change would reportedly align retirement age with the actual current experience within the scheme (where the average retirement is approximately 63.44) and would reportedly relieve the significant burden of having to hold reserves based on the age of 60.

Grogan reportedly said that CIÉ believes that, having concluded complex and difficult industrial negotiations, the changes are being "essentially frustrated by obstruction of a straightforward step" involving a submission to the Pensions Authority of a funding proposal.

Fast-Track Commercial Court And Opposition

The case was reportedly admitted to the fast-track Commercial Court by Mr Justice Denis McDonald on the application of Kelley Smith SC, for the pensions committee. It was reportedly opposed by Úna Tighe SC, for CIÉ, on grounds including delay in bringing the case.

© 2021 Hospitality Ireland – your source for the latest industry news. Article by Dave Simpson. Click subscribe to sign up for the Hospitality Ireland print edition.

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