Labour Court Database __________________________________________________________________________________ File Number: CD87846 Case Number: LCR11646 Section / Act: S67 Parties: BORD NA MONA - and - AMALGAMATED UNION OF ENGINEERING WORKERS (T.A.S.S. |
Claim on behalf of approximately 750 workers for a change in the pension scheme.
Recommendation:
6. The Court has noted that pension increases paid up to 1984,
were approved as a consequence of Actuarial Valuations over the
years. Increases were not subsequently approved because of the
actuarial position.
7. In all the circumstances, the Court recommends that the
parties should continue to operate the scheme as amended by
agreement in 1969. The Court further recommends that they should
meet as soon as possible following the availability of the
Actuarial Report promised for early 1988.
Division: Mr Fitzgerald Mr Shiel Mr O'Murchu
Text of Document__________________________________________________________________
CD87846 RECOMMENDATION NO. LCR11646
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: BORD NA MONA
and
AMALGAMATED UNION OF ENGINEERING WORKERS (T.A.S.S.)
SUBJECT:
1. Claim on behalf of approximately 750 workers for a change in
the pension scheme.
BACKGROUND:
2. The pension scheme in the Company is funded on a 50/50 basis
with the workers contributing up to 8.50% of salary. The scheme was
amended in 1969, to provide for pension increases. From then
until 1985, increases were paid on all pensions, based on salary
increases in the previous year. In 1986, pensions were not
increased. The Union requested an increase and was informed that
the increases which had applied in the past were not specifically
provided for under the scheme but had been at the discretion of
the trustees. The Company also pointed out that the trustees had
decided not to grant an increase in pensions after receiving
actuarial advice. As agreement at local level could not be
achieved, the matter was referred on 21st July, 1987, to the
conciliation service of the Labour Court. No settlement was
achieved at a conciliation conference held on 27th October, 1987,
and the matter was referred on 11th November, 1987, to the Labour
Court for investigation and recommendation. A Court hearing took
place on 10th December, 1987.
UNION'S ARGUMENTS:
3. 1. The Union contends that the non-payment of an increase in
the pension scheme represents a change in the scheme for the
existing members and has had catastrophic effects for some
retired staff. Members of the scheme reasonably assumed that
they were in a scheme which was index linked, as is the case
in the majority of public sector pension schemes.
2. It would be unreasonable to expect the scheme members to
finance an increase by a higher level of contributions since
most pension schemes in the private and public sectors are
funded as a 2:1 contribution. If the scheme requires more
money to fund an increase it should be met by the Company.
3. Some members of the scheme receive no income other than
the Company pension which has not increased since 1985,
despite a substantial increase in the pension funds since
that period. The cost of granting a 5% increase is
negligible compared to the income from the schemes
investments, (details provided to the Court).
4. The Union contends that the Company has no right to
renege on a commitment made to the staff. The existing
scheme, with increases, should continue and the subject of
any shortfall in funds should be a matter of seperate
discussions and negotiations.
COMPANY'S ARGUMENTS:
4. 1. In 1969, the regulations governing the scheme were
amended to allow an increase in pensions "as may be
authorised from time to time ............. with the consent
of the Minister for Finance". This amendment and the
financial state of the fund enabled increases to be granted.
2. This position obtained until July, 1984, when the last
increase was authorised. Following an actuarial valuation as
at 31st March, 1985, which showed a substantial deficit in
the fund, it was decided not to approve further increases
pending an improvement in the scheme's finances.
3. A special actuarial valuation as at 31st March, 1987, has
been commissioned. The results of this should be available
in early 1988, at which time the scheme will be reviewed. In
the meantime, a Consultative Group Committee, made up of all
interested parties including the trade Unions, has been
established.
4. Pension increases conceded up to July, 1984, were
adjusted in line with wage movements rather than the Consumer
Price Index (C.P.I.). As a result, the long-serving
pensioner, even without receiving increases since then, has
had a greater percentage increase in his pension to date than
the percentage increase in the C.P.I.
5. A similar pension scheme, known as the Regular Works
Employees Superannuation Scheme, with over 4,000 members also
exists in the Company. Over the years this scheme has had to
increase its contribution rate in order to provide improved
benefits. Concession of the Union's claim would have major
implications for this scheme.
RECOMMENDATION:
6. The Court has noted that pension increases paid up to 1984,
were approved as a consequence of Actuarial Valuations over the
years. Increases were not subsequently approved because of the
actuarial position.
7. In all the circumstances, the Court recommends that the
parties should continue to operate the scheme as amended by
agreement in 1969. The Court further recommends that they should
meet as soon as possible following the availability of the
Actuarial Report promised for early 1988.
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Signed on behalf of the Labour Court
Nicholas Fitzgerald
_________________________
14th January, 1988
B.O'N./P.W. Deputy Chairman