The Irish Bank Officials’ Association (IBOA) has condemned a decision by Ulster Bank to reduce the benefits to staff in its final salary pension scheme and to freeze pay.
The union, which says it has 5,000 members among the 7,000 staff affected by the bank’s plans, said employees were “outraged” that management was proposing an assault on pensions in light of news that former chief executive, Sir Fred Goodwin, was awarded an annual pension of £700,000 sterling “despite bringing RBS to the brink of collapse”.
“The Bank’s proposal to make no pay award to ordinary bank officials for 2009 is similarly unacceptable – not least because no later than Monday of this week, management advised us that they were committed to entering a conciliation process on pay at the start of September,” the IBOA said in a statement.
The union added that the bank has a “contractual obligation” to staff to pay increments and performance rewards under PEF.
Ulster Bank later said all managers and those at senior management level have had a pay freeze enforced. “For all other staff we are seeking no pay increase for 2009,” added a spokeswoman. She said talks with unions were ongoing.
The IBOA said it planned to ask independent mediator, Kieran Mulvey to review all issues around pay and pensions at a meeting with management next week.
Ulster Bank plans to cap annual increases in pensionable pay by 2 per cent or the rate of inflation, whichever is lower.
The bank also plans to close its defined benefit pension scheme to new members from November 1st. Under this scheme retiring employees receive a set percentage of their final salary.
Ulster Bank says the measures are in line with similar changes proposed by the bank’s British parent RBS.