Business

Judge urges CIÉ and employees to agree a deal on funding firm’s largest pension scheme

Dispute centres on Superannuation Scheme 1951, which has assets worth €1.5bn and nearly 5,000 members

Heuston station in Dublin. Mr Justice Sanfey said both CIÉ and the members are expected to contribute to 'maintain the solvency of the fund'. Photograph: iStock

Barry J Whyte
Mon Apr 22 2024 - 12:27

A High Court judge has urged CIÉ and a group of employees to meet in the coming days to agree a path forward in a long-running dispute over the semi-State company’s biggest pension fund.

The dispute centres on CIÉ’s Superannuation Scheme 1951, which has assets worth €1.5 billion and nearly 5,000 members, some of whom are still working.

The scheme has been the subject of a long-running dispute over how to bridge a funding gap between its assets and its liabilities, and also who is responsible for bridging the gap.

On Friday, Mr Justice Mark Sanfey ruled that the two parties were both obliged to provide funding to bail out the pension if it found itself experiencing solvency issues.

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Mr Justice Sanfey said “it seems to me clear from the wording of [the rules] that, in attempting to agree a funding proposal, both contributors – CIÉ and the members – are expected to contribute and to support and maintain the solvency of the fund”.

According to those rules, CIÉ can be called upon to provide contributions up to 3.6 times those of the members in order to keep the scheme solvent.

However, he added that this rule as it applies to CIÉ “is not absolute”, and sits alongside the right to address any solvency issues by either increasing member contributions or cutting member benefits.

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Where the requirement to maintain the solvency of the fund exceeds the threshold set out in the rules, he said, “the parties must confer with a view to a negotiated solution”.

If agreement could not be reached, he said, the rules say that the case could go before the Pensions Authority, which has the power to impose its own funding solutions.

The two sides have been in dispute over the pension fund problem for more than a decade over shortfalls at the time in the scheme. The matter has been heard before the Workplace Relations Commission and the Labour Court, where a deal was agreed that included cuts in benefits and an increase in the retirement age above 60.

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Soon after that, several members of the pension’s elected committee filed proceedings in the High Court to seek a determination that CIÉ was required to maintain the solvency of the fund.

In recent years, the pension fund’s financial situation has improved and it currently meets the minimum funding threshold required by pension law in Ireland, though CIÉ has insisted that the Labour Court recommendations will need to be implemented.

In his ruling, Mr Justice Sanfey said “the parties may wish to consider what orders should be made on foot of this judgment”.

He urged the parties to meet “to agree appropriate orders in advance” of May 3rd, when it will next be heard in court.

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When contacted by The Irish Times, a spokesman for CIÉ said that the company was reviewing the judgment with its legal advisers.

“We will engage with the trade union group on actions needed to finally give the scheme the stability needed in the interests of members, both current employees and pensioners, and to protect the financial viability of the CIÉ Group itself,” he said.

Emmett Cotter, one of the elected trustees of the pension scheme, and one of the eight plaintiffs in the litigation, welcomed Mr Justice Sanfey’s decision. He added that the plaintiffs “will be studying the judgment in greater detail in the coming days and will be communicating with the membership of the scheme”.

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