Labour Court Database __________________________________________________________________________________ File Number: CD86457 Case Number: LCR10982 Section / Act: S67 Parties: DOUWE EGBERTS LIMITED - and - IT&GWU |
Dispute concerning the release of actuarial reports of Company pension scheme.
Recommendation:
5. Having considered the submissions made by the parties the
Court accepts that the best assistance as to the proper care of
the pension fund derives in fact from access to the funds
creditors and trustees on the basis proposed by Company. However
having regard to the fact that the workforce are contributors to
the fund the Court does accept that they are also entitled to an
actuarial report on the standing of the fund and recommends that
this should be provided on the same basis and at the same time as
such a report is provided to the Revenue Commissioners.
Division: Mr O'Connell Mr Collins Mr O'Murchu
Text of Document__________________________________________________________________
CD86457 THE LABOUR COURT LCR10982
CC86572 INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
RECOMMENDATION NO. LCR10982
Parties: DOUWE EGBERTS LIMITED
and
IRISH TRANSPORT AND GENERAL WORKERS' UNION
Subject:
1. Dispute concerning the release of actuarial reports of Company
pension scheme.
Background:
2. The Company is engaged in the manufacture of tobacco products
and employs a total of 150 people, most of whom are represented by
the Union. A contributory pension scheme is operating within the
Company since April, 1980, when it replaced an original
non-contributory scheme. The main provisions of the scheme are as
follows:
(a) Employee's contribution - 4% of pensionable salary.
(b) The Company to fund the remaining sums necessary to
provide for the benefit set out below. (The Company's
current funding rate is approximately 17%).
(c) The pension scheme provides for two-thirds pension
after 40 years' service, together with an escalation
clause of 3% per annum compound.
There are other benefits including widows, spouse and childrens
pensions, death in service benefit and escalation of spouses and
childrens pensions. On 24th March, 1986 the Union met the Company
to discuss the pension scheme. The Union requested that the
actuarial report normally produced once every three years by the
pension fund managers be released to them. The Company refused to
accede to this request and the matter was referred to the
conciliation service of the Labour Court on 1st April, 1986. A
conciliation Conference was held on 3rd June, 1986, (earliest
available date suitable to the parties) and as no progress was
possible both sides agreed to refer the matter to the Labour Court
for investigation and recommendation. A Labour Court hearing was
held in Mullingar on 18th November, 1986, a date suitable to both
parties.
Union's arguments:
3. (i) It is important that our members know that the money
which is stopped from their wages is actually paid into
the fund. This is especially so after some recent
developments with firms that have ceased operations
only to have the employees discover that their pension
fund had not been funded in the manner they believed
and were paying for it to be funded.
(ii) If our members had available to them an actuarial
report then they would know if they sought changes in
the scheme whether they could be introduced without
increasing the cost to the Company or themselves.
(iii) The Company has an agreement with the Union recognising
a relativity with the other three main tobacco
factories. The Court has already issued a favourable
recommendation in respect of a similar claim (L.C.R.
5744 refers), we ask now for a recommendation in line
with this recommendation.
(iv) As the Union's request does not cost the Company any
money it is hard to see any reason why it should be
refused.
Company's arguments:
4. (a) The Company has offered to ensure that the trustees of
the fund (none of whom are involved in the Company)
make themselves available on an annual basis to answer
any queries that the Union or employees may have.
(b) The Company has offered to have their Auditors supply
an annual certificate to show that the Company is
meeting its contributions to the fund.
(c) The only benefit which can arise from the employees'
request, is that it would give information to the Union
which could be used to either improve the benefits
under the Scheme, or decrease the contributions. The
Court will be well aware that a pension fund, having
regard to inflation or judicious management of the
fund, may show a surplus in any one year. If the
Union's claim was conceded and they successfully
negotiated an improvement in the pension benefits
arising out of such a surplus, then the
opposite may occur in the following year and the fund
may show a loss. In such circumstances, the obligation
would be on the Company to increase its funding, while
there is no comparable obligation on the employees to
increase their funding beyond the current level. It
seems to us to be totally unrealistic that the Company
should take all the risks on the level of funding while
the employees are totally protected.
RECOMMENDATION:
5. Having considered the submissions made by the parties the
Court accepts that the best assistance as to the proper care of
the pension fund derives in fact from access to the funds
creditors and trustees on the basis proposed by Company. However
having regard to the fact that the workforce are contributors to
the fund the Court does accept that they are also entitled to an
actuarial report on the standing of the fund and recommends that
this should be provided on the same basis and at the same time as
such a report is provided to the Revenue Commissioners.
~
Signed on behalf of the Labour Court
John O'Connell
_________________________
Deputy Chairman.
13th February, 1987.
M.D./J.C.