LCR21550

The dispute before the Court relates to Bord na gCon’s (‘the Respondent’) Defined Benefit Pensions Scheme. Like many other such pension schemes, the Respondent’s scheme experienced difficulties over the past number of years in meeting the required solvency levels stipulated in the Pensions Acts. By agreement between the Union and the Respondent, and with the approval of the Pensions Authority, a funding scheme has been put in place to address the solvency issue. The terms of a new Defined Contribution Scheme have also been agreed and implemented.

The specific issue before the Court, in the within referral, concerns the date until which current active members of the Defined Benefit Scheme may continue to accrue contributions to that scheme. The Union’s position is that Management had proposed to it at a meeting in June 2016 – in the context of formulating detailed proposals about both the new Defined Contribution Scheme and the existing Defined Benefit Scheme (which proposals were to be put before the Respondent’s Board for ratification at a meeting in August 2016) – that current active members of the Defined Contribution Scheme should be permitted to continue to accrue contributions to that scheme until January2022.

It is accepted on behalf of both the Union and the Respondent that the outcome from the June 2016 was merely a set of proposals each of which was subject to ratification (or otherwise by the Board). There was no agreementper seentered into between the parties at that point in time. The Board did consider the package of proposals at its August 2016 meeting and determined that it was not in a position to ratify the particular proposal to keep the Defined Benefit Scheme open for accrual until January 2022. The Respondent’s position is that the Board in declining to accept that proposal instead substituted a date of 31 December 2018 as the final date for accrual of contributions as, in its view, keeping the scheme open for further contributions until the later date as proposed created a risk that the existing deficit in the scheme would increase and the current Board would thereby be transferring an additional liability to any successor Board. The term of the current Board, it appears, runs until January 2019.

Discussion & Recommendation

The Court notes that the agreed comprehensive proposals that were to be put to the August 2016 meeting of the Respondent’s Board were finalised at a meeting in June 2016. Present at that meeting were representatives from the Union, the senior management team, Irish Pensions Trust and the pension scheme’s actuaries. It is of particular significance that the actuaries did not, in the course of that meeting, raise any red flag in relation the issue before the Court in the within proceedings i.e. the proposal to permit current active members of the Defined Benefit Scheme to continue to accrue contributions until 2022.

In its submission to the Court, the Respondent – in seeking to oppose the Union’s request to the Court for a recommendation in this regard - relies substantially on the current Board’s reluctance to transfer what it terms an ‘unknown liability’ to any successor Board. In the Court view this position seems to be at odds with the Board’s ratification of a funding proposal (as approved by the Pensions Authority) which runs until 2023. Furthermore, the Respondent did not present to the Court any actuarial report or other evidence to substantiate its claim that to permit accruals within the Defined Benefit Scheme to continue beyond December 2018 until January 2022 would pose an increased substantial risk to that Scheme.

Having regard to the parties’ written and oral submissions to it, the Court recommends in favour of the Union’s position: current active members of the Respondent’s Defined Benefit Scheme, who otherwise quality to do so within the rules of the Scheme, should be permitted to continue to accrue contributions to the Scheme until 1 January 2022.

Should any further dispute arise between the parties in relation to the Respondent’s Defined Benefit Scheme, the Court recommends that the parties should engage – informed by relevant professional pensions/actuarial advice - with a view to achieving a shared understanding of the disputed issues. Thereafter, if the matter remains unresolved, the dispute should be processed in line with normal industrial relations practices, up to and including a referral to the Labour Court.

The Court so recommends.

Signed on behalf of the Labour Court



Alan Haugh
JD______________________
14 August 2017Deputy Chairman



NOTE

Enquiries concerning this Recommendation should be addressed to John Deegan, Court Secretary.