The liquidator of a Dublin chemicals company claims the State is bound by legislation to pay a record €6 million into its insolvent defined-benefit pension scheme.
Liquidator Kieran Wallace denied a suggestion by lawyers for the State that the initial figure of €7 million arrived at for the liability “wasn’t scientifically reached”, telling the Workplace Relations Commission that: “We would not be putting in a number in any shape or form that we just pluck out of thin air.”
A claim against the Employer’s Insolvency Fund for the sum was rejected by officials last year after they concluded that the bill being presented to them represented the “entirety of the deficit” in the scheme.
Mr Wallace, in his capacity as the liquidator of Protim Abrasives Ltd, is appealing that decision in a complaint to the Workplace Relations Commission under the Protection of Employees (Employer’s Insolvency) Act 1984, as amended, against the Minister for Enterprise, Trade and Employment.
An adjudicator remarked on Friday that he was the first complainant to raise a challenge of this nature before the WRC.
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Protim Abrasives went into liquidation on November 12th, 2009, after a rescue bid fell through “primarily” because of the scale of the pension liability, Mr Wallace told the tribunal – with the liquidation still live because of the pension fund dispute.
Mr Wallace said he admitted a preferential claim of €7 million from the pension scheme to the liquidation after consulting with experts on an initial calculation of €8.6 million from the scheme’s actuaries.
This was submitted as a payment demand to the company in early December 2009 – after it entered liquidation, but before the expiration of one month’s notice by the firm that it was cutting off contributions to the pension fund.
The State maintains the request is out of time because it was made after the date the company went into liquidation.
It was put to Mr Wallace by a State barrister that the “even” number of €7 million was an “extraordinary figure” which had not been “scientifically” arrived at.
“I would not have admitted – I don’t admit a number into any liquidation that I haven’t taken advice on. Having taken advice, I felt €7 million was the right number to admit,” Mr Wallace said.
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The liquidation of the firm yielded a dividend of €875,000 for the pension scheme, he said, leaving a gap of €6.1 million, the tribunal heard.
The scheme’s actuary, Paul O’Brien of Willis Towers Watson, explained he had initially calculated the sum required to fund the defined benefits at €8.65 million if the trustees were to go to the insurance market to buy annuities for the members.
The complexity of the liquidation was part of the reason an initial application to the State for funding to cover unpaid employer contributions to the pension scheme was not made until 2018, the tribunal was told.
Daire Breathnach, principal officer in the redundancy and insolvency section of the Department of Enterprise, said it was ultimately decided to reject the claim on behalf of the scheme in August last year because the actuarial report of December 2009 was “simply out of time as it was post the liquidation”.
The adjudicator, Ms McGrath, adjourned the hearing and said she would be asking for three days to be set aside in the new year for legal argument in the matter.
