While cautiously welcoming the Government’s intention to introduce legislation to provide a level of protection for contributors to Defined Benefit (DB) schemes that encounter difficulty, Unite believe that the coalition must do more for workers.
According to the union’s Regional Secretary Jimmy Kelly, a safety net of sorts for scheme members should their company be restructured, wound-up or declared insolvent represents a step in the right direction. But it’s only the first step as far as Mr Kelly is concerned.
“We remain concerned with the Government’s minimalist approach when it comes to compliance with the EU’s Insolvency Directive, and we also believe that what’s been proposed may not be in full compliance with that Directive,” he said.
“While Unite welcomes the fact that, under the proposed legislation, members of DB schemes will have some protection in the event of their scheme being restructured or becoming insolvent, the 50 per cent protection envisaged by the proposals in the event of double insolvency refers to the 2007 Robins Judgement delivered by the European Court of Justice which stated that 49 per cent was insufficient.
“Neither the European Court of Justice nor any other Court since, has answered the more difficult question of what percentage is sufficient. We remain particularly concerned that this minimum level of protection is apparently to be achieved by cutting the accrued benefits of future and existing retirees.”
Mr Kelly said that the Government’s first statement on this matter, issued a fortnight ago, appeared to “indicate that, under the new provisions, Irish workers would still enjoy substantially less protection than that afforded to UK workers in the wake of the Robins judgement.
“We need to remember that workers have paid in all their working lives to ensure an adequate retirement income and they deserve to be fully protected.”
According to the Department of Social Protection on November 19th: “The package addresses the situation where an underfunded Defined Benefit pension scheme winds up in deficit or elects to restructure.
“It can arise at present that pensioners receive all or almost all the pension fund and the members who have contributed but not retired receive considerably less than expected. These measures will ensure a more equal distribution of assets in an underfunded Defined Benefit scheme when an insolvency/restructuring occurs.
“The measures will apply only in a limited set of circumstances, meaning the potential number of schemes affected will be small.
“In those limited circumstances, the measures will ensure a fairer deal for employee and former employee members by increasing their future pension entitlements, while prioritising an occupational pension of up to €12,000 for existing pensioners in addition to their State pension entitlements.”
As for the implications of this proposal for Waterford Crystal pensioners, Jimmy Kelly felt that, fundamentally, the bigger picture remained Unite’s sole focus.
“I would like to stress that Unite, as the union representing former Waterford Crystal workers, has received no approach from Minister (Joan) Burton’s Department as of the time of issue: as far as we are concerned, the case is continuing to make its way through the Irish courts following April’s decision by the European Court of Justice that the Irish State has failed to protect their pension entitlements.
“The situation confronting pension scheme members today is the result of a failure by successive Governments to implement a sustainable pensions policy which is not reliant on private pensions and which provides retirement security.
“Workers should not be asked to pay the bill either for that policy failure, or for the economic crisis which has precipitated a shortfall in many pension schemes.”
Jimmy Kelly concluded: “Rather than rushing through legislation, we would urge the Minister to consult with all stakeholders in order to devise a pension protection system which fully protects the entitlements of workers.”