Comment: The recent surge in interest concerning pension provision, although long overdue, is both welcome and necessary and evidenced by two thoughtful articles in last week's Irish Times by Marc Coleman and Brian Forrester, writes Larry Broderick

Alarm bells were raised during negotiations on the new national wage agreement Towards 2016 where the Irish Bank Officials Association (IBOA) along with other unions, sought commitments from employers not to act arbitrarily in changing existing pension arrangements, pending a comprehensive tripartite review on the whole issue of pension provision in both the public and private sector.

Unfortunately, employers failed to respond positively to this approach and have subsequently engaged in an orchestrated campaign to close more advantageous defined benefit schemes or change existing pension provision before this comprehensive national review takes place.

These actions are not just cynical but also irresponsible and potentially dangerous and will, by their very nature, have a significant impact not only on the continued growth of the Irish economy, but the whole industrial relations landscape of the State.

It is clear that the environment in which pensions operate is changing with higher life expectancy and external regulation being key impacts. Pensions by their very nature involve long-term provisions. Therefore, even marginal changes in basic assumptions can shift the potential outcomes.

Given these factors, the IBOA is alarmed at the growing number of profitable companies that are looking at staff pensions as an opportunity for short-term cost savings at the expense of new employees and ultimately the taxpayer.

This short-term approach, as evidenced recently by Bank of Ireland, is not acceptable, particularly at a time of unprecedented profit. What makes Bank of Ireland's actions even more disturbing is that its forcing through of a new pension scheme breaches existing agreements with unions and also disregards the Labour Court's request to maintain the status quo pending a Labour Court investigation and recommendation.

There is a consensus among most economists that one of the principal cornerstones for sustained economic growth in Ireland has been the role played by national wage agreements. However, in the past year, as evidenced by Irish Ferries and Bank of Ireland, certain employers choose to ignore agreements (when it suits them) and bodies established by law.

Is it right and proper that very profitable employers like Bank of Ireland can unilaterally change the fundamental terms and conditions of employees on pensions and then expect staff to accept minimal wage increases that barely cover cost of living increases?

Clause 8.3 of Towards 2016 provides social partners with the space and opportunity to review comprehensively pension policy into the future. This national agreement was only just signed off by Ibec and, by extension, Bank of Ireland in the last couple of months.

It is incumbent on all parties to desist from short-term opportunistic actions which could have serious consequences to this review.

Employers must recognise that pensions are a significant benefit for ordinary employees (in the same way as they are regarded by senior executives). Employees and their representatives will have difficulty accepting the need for unilateral change at a time of economic boom.

If employers are allowed to close pension schemes and reduce benefits for employees, it will totally undermine the State's future national pensions strategy and the provisions of Towards 2016, therefore creating significant industrial unrest.

There is an urgent need for Government to step into the pensions debate and give a clear message to profitable employers to desist from short-term opportunistic actions on pensions while a comprehensive strategy on pensions is being developed.

If voracious employers like Bank of Ireland are allowed get away with taking decent pensions from their most vulnerable staff, Irish society and future generations of taxpayers will have to bear the brunt and end up subsidising pensions for staff who have worked in the most profitable sector of our economy.

Surely that irony can't be lost on our policy makers. If they continue to ignore this creeping trend, they are creating a pensions time bomb for future generations.

It is interesting to note that employers like Bank of Ireland which seek to change their existing defined benefit schemes take a totally different view when it comes to the issue of mandatory pension contribution. Employers like Bank of Ireland tell us there are many other options to be explored before this should ever be considered.

Simply closing defined benefit schemes is not the answer to the pension problem. It will result in a backlash of salary claims and it will be divisive in the workplace, creating a two-tier system whereby staff doing the same job will be on totally different terms and conditions of employment.

This blatant discrimination against mostly younger workers should not be acceptable in any business, but especially not in a company that reports profits of €1.5 billion. What is required is a long-term strategy geared to addressing employees' needs, companies finances and future pension provisions.

It is not acceptable for any employer, particularly those reporting record profits, to slash staff pension rights under a pretext of pension reform when it appears patently clear that it is about cutting costs to maximise short-term profits, which in turn will give the bank's senior executives astronomically high bonuses and, irony of ironies, massive payments into their pensions!

For our part, the IBOA is more than willing to discuss pension reform as long as that is what it is. We are engaged in detailed negotiations with other financial institutions fully utilising the industrial relations mechanisms of the State to address "real" problems and to ensure that staff who give their working lives to profitable companies can retire with a decent pension and not be left in relative poverty because of corporate greed.

Larry Broderick is general secretary of Irish Bank Officials Association