Labour Court Database __________________________________________________________________________________ File Number: CD94683 Case Number: LCR14676 Section / Act: S26(1) Parties: TRINITY COLLEGE, DUBLIN - and - THE IRISH CONGRESS OF TRADE UNIONS (I.C.T.U.;ICTU |
Changes in the College's Pension Scheme.
Recommendation:
The Court considered the written and oral submissions made by all
involved in the issue. Given the Unions' stated willingness to
explore options, with a view to meeting the financial requirements
of the College, the Court makes the following Recommendation:-
That the parties involved commence discussions immediately on
the changes to the present pension scheme funding in order
that the issue be resolved amicably.
The Court believes that this should take no longer than 2 months
from date of issue of this Recommendation. If no resolution
emerges, then the issue can be brought back to a Court hearing by
either side and the Court will make a specific Recommendation.
Division: Mr Flood Mr Keogh Mr Walsh
Text of Document__________________________________________________________________
CD94683 RECOMMENDATION NO. LCR14676
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES:
TRINITY COLLEGE, DUBLIN
(REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS CONFEDERATION)
AND
THE IRISH CONGRESS OF TRADE UNIONS (I.C.T.U.)
SUBJECT:
1. Changes in the College's Pension Scheme.
BACKGROUND:
2. As a consequence of an instruction from the Higher Education
Authority (H.E.A.), T.C.D., Dublin is proposing to change the
existing pension scheme for weekly employed staff to a scheme
co-ordinated with Social Welfare pension arrangements. The
new co-ordinated scheme would affect 220 current employees
and any newly recruited staff. The College claims that,
having received the instruction from the H.E.A., it has no
option but to implement it. The position of the I.C.T.U.
Group of Unions is that there should be a distinction between
the pension of existing staff and that of new staff.
I.C.T.U. also believes that changes should be made only by
consent and that existing staff should be in a position to
choose which scheme they might wish to join.
The dispute was the subject of a conciliation conference
under the auspices of the Labour Relations Commission, on the
1st of November, 1994, at which agreement was not reached.
The dispute was referred to the Labour Court, on the 23rd of
November, 1994, in accordance with Section 26(1) of the
Industrial Relations Act, 1990. The Court investigated the
dispute on the 25th of January, 1995.
COLLEGE'S ARGUMENTS:
3. 1. The State provides funding for the College Pension
Scheme through the H.E.A. at the rate of 15%. The State
also provides funding for Trinity College staff who are
in the A1 PRSI category by means of employers' PRSI
contributions at the rate of 12.2%. College weekly-paid
staff who are in the A1 category receive two pensions,
i.e., a College pension and a State Social Welfare
Pension. Moreover, a member of staff with forty years'
service, currently on the A1 PRSI rate, earning #210.00
per week, will receive a total pension of #210.00 p.w.
(made up of #71 Social Welfare pension and #139 from the
College's scheme), i.e., there will be no change in
income. This situation is entirely anomalous in the
public sector.
2. In all public sector pension schemes and in the vast
majority of private sector pension schemes, occupational
pensions are co-ordinated with Social Welfare Retirement
/Old Age Contributory Pensions. This means that the
pensionable salary on which the occupational pension
benefits are calculated is worked out by a formula which
involves subtracting the single Social Welfare
Contributory Old Age Pension rate from the appropriate
annual rate of pay. In pension schemes based on
1/80ths, such as the Civil Service scheme, this means
that pensionable salary is calculated on the basis of
annual pay on retirement minus twice the annual amount
of the single rate of Social Welfare pension. In 1/60th
schemes, such as the existing College scheme,
pensionable salary is annual pay minus one and a half
times the annual Social Welfare pension rate. The
rationale behind co-ordination is to ensure that no one
receives a pension exceeding a maximum of two-thirds of
final salary (including Social Welfare pension
entitlements).
3. Co-ordination reflects, inter-alia, the fact that the
employer, in addition to making a contribution towards
the occupational pension scheme (15%), also pays a 12.2%
PRSI contribution in respect of employees in Class A as
against 2.35% in respect of those in Class D.
Entitlements of staff on the A1 rate, in relation to
past service, will remain unaffected. The decision of
the State authorities to adjust the College's funding to
take account of "excessive" contributions will have no
impact on benefits earned on past service.
Trinity College has been instructed by the State
authorities that it cannot divert funds from other
elements of the State grant or from other sources of
income to maintain unco-ordinated pension benefits. The
net effect is that the State authorities intend to
adjust downwards the College's funds to compensate for
the College's effective over-funding of its pension
scheme by the provision of the unco-ordinated pension
benefits of staff on the A1 rate of PRSI. Staff will,
nevertheless, retain the benefits accrued in the past
while unco-ordination applied.
4. Co-ordination of benefits already exists for staff on
the A1 rate of P.R.S.I. in respect of sick pay and
maternity benefit. Similar co-ordination arrangements
should apply in respect of pension benefits.
I.C.T.U'S ARGUMENTS:
4. 1. The dispute has arisen following an attempt by the
H.E.A., and the authorities of the College, to change
the conditions of the pension scheme applying to the
vast majority of College maintenance, clerical, library
and portering staff, who are on a Class "A" Social
Welfare contribution. The scheme has been in existence
since 1972 and provides for the normal two thirds
pension after 40 years, in addition to Social Welfare
benefits.
2. The dispute relates to a dispute in summer, 1994,
concerning pensionability of part-time workers, which
was the subject of a Labour Court hearing,
(Recommendation pending). The application of the
formula for integration of pension and Social Welfare
entitlements has the net effect of setting at nought the
occupational pension element of a part-time worker's
pension. If it is public policy that workers should be
encouraged to make provision for their old age, outside
the basic Social Welfare system, they must be allowed a
return on their contributions.
3. In an instance of a major issue of principle, the
opportunity to negotiate is required, with neither party
taking precipitative action. Such action was taken by
the H.E.A. when it instructed the College to introduce a
co-ordinated pension scheme forthwith, and stated that
#300,000 would, accordingly, be deducted from the
College's grant.
4. The instruction of the H.E.A. concerned terms and
conditions of employment of university staff and were
appropriate to the industrial relations forum.
5. The H.E.A. previously issued an edict concerning the
unilateral abolition of certain concessions regarding
tuition fees enjoyed by college staff. This resulted in
a Labour Court hearing and Recommendation LCR10484 in
which the Court recommended that:-
"....in the interests of good industrial relations,
in-depth discussions should have taken place
between the parties concerned prior to the
reference to the Court of this dispute.....".
Accordingly, the present dispute would be better settled
through negotiation rather than by edict. This has been
the case in other universities. In U.C.G., for example,
a unified pension scheme was introduced in much more
difficult circumstances, by negotiation.
RECOMMENDATION:
The Court considered the written and oral submissions made by all
involved in the issue. Given the Unions' stated willingness to
explore options, with a view to meeting the financial requirements
of the College, the Court makes the following Recommendation:-
That the parties involved commence discussions immediately on
the changes to the present pension scheme funding in order
that the issue be resolved amicably.
The Court believes that this should take no longer than 2 months
from date of issue of this Recommendation. If no resolution
emerges, then the issue can be brought back to a Court hearing by
either side and the Court will make a specific Recommendation.
~
Signed on behalf of the Labour Court
13th February, 1995 Finbarr Flood
M.K./M.M. _______________
Deputy Chairman
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Michael Keegan, Court Secretary.