The standoff between State-owned transport company CIÉ and the Pensions Authority on the €550 million deficit in a defined benefit pension scheme for managerial grade employees is the latest development in a long-running saga between the two bodies. Earlier this month the authority set a new deadline for the company to answer questions on how it plans to close the deficit, or risk prosecution or the regulator moving to enact powers to reduce member benefits or wind up the fund.
CIÉ has two defined benefit pension schemes that up to the end of last year had combined deficits of €975 million. It is s a staggering sum of money. Unlike most of its peers in the public sector, CIÉ failed to deal with the legacy issues involved in its defined benefit pension funds after the 2008 economic crash. And it has spent the past two years trying to thrash out solutions for the schemes.
Talks with unions under the auspices of the Labour Court have resulted in proposals being put together for the funds. Frontline workers have accepted the changes to their scheme, which should come into effect during the next couple of months.
But the committee of trustees for managerial grades (about 2,200 members in the CIÉ 1951 Superannuation Scheme) has stymied efforts to implement changes to that fund. The view appears to be that the company and the scheme are too big to fail, presumably because it is a State-owned company.
CIÉ seems determined to press ahead via changes to statutory instruments, which have been notified to the Minister for Transport and require various formal legal steps to be followed before taking effect. This could yet end up before the High Court.
After 18 months of restrictions in the pandemic and all the damage that has been done to various sectors of the economy, there will be little public sympathy for managers at a State company who won’t accept change to a scheme where the employer contributes 28 per cent of their salary to the fund and they are guaranteed a pension on retirement, from age 60. Especially when bus drivers and other grades have already accepted changes to their scheme.