FULL RECOMMENDATION
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : THE BAR COUNCIL OF IRELAND (REPRESENTED BY TOM MALLON BL - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION (REPRESENTED BY PEADAR NOLAN SIPTU) DIVISION : Chairman: Mr Haugh Employer Member: Mr Marie Worker Member: Ms Tanham |
1. Pension Issue
BACKGROUND:
2. This dispute could not be resolved at local level and was the subject of a Conciliation Conference under the auspices of the Workplace Relations Commission. As agreement was not reached, the dispute was referred to the Labour Court on 7th February, 2018 in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on 15th March, 2018.
3.UNION'S ARGUMENTS:
. 1. SIPTU is seeking a reasonable agreement whereby the pain of addressing the cost of pension increases are shared.
2. SIPTU suggests that the Employer look at options including the possibility of meeting them half way by reducing their commitment of 5% and 3% increases for pensions in payment to 2.5% and 1.5% respectively and also to look at linking future increases to CPI.
3. Going forward SIPTU wants the Employer to commit to 50% of the rate of increases for pensions in payment currently fixed at 5% for pre-1997 and 3% post 1997.
EMPLOYER'S ARGUMENTS:
4. 1. In July 2017, it was decided that the best way of achieving longer-term stability and sustainability of the scheme, protecting most scheme benefits (including 100% pension at retirement and retaining salary increases) was to remove guaranteed increases of 3% and 5% (level of increase depends on when a member joined the organisation).
2. The Employer is not in a position to commit to a funding proposal that required ongoing annual contributions if €622,000.
3. By making the proposed changes to benefits, members will receive 100% of their starting pension entitlement at retirement date, which, importantly includes salary increases earned to retirement. The proposed changes are the best the Employer can commit to, with the only real alternative being a scheme wind up, which the Employer prefers to avoid and believes that this in not in the best interests of all members.
RECOMMENDATION:
Background to the Dispute
There are two pension schemes in place for employees of the General Bar Council of Ireland (‘the Bar Council’): a defined benefit pension scheme (‘DBPS’) that was established in 1983 but was closed to new entrants and future accruals in December 2010; a defined contribution scheme that was established on 1 January 2011 and replaced the DBPS. The within dispute relates only to the DBPS of which there are currently 37 active members.
In the period since 2010, the Bar Council has paid some €1.3 million into the closed DBPS in order to meet the minimum funding standard requirement of the scheme under the rules set down by the Pensions Authority. In 2016, the Bar Council was informed by the Trustee of the DBPS that the scheme was in deficit and that the Council was required to make a funding proposal to the Pensions Authority. In May 2017, the Trustee informed the Bar Council that a sum of €622,000 per annum would have to be paid into the scheme in order to maintain it without a reduction in benefits. The Bar Council took the view that it could not afford to make payments at this level having regard to it overall level of income and expenditure. It, therefore, proposed that the scheme be amended to remove the guarantee of increases on future pensions in payment of 3% per annum for post-March 1997 members and 5% per annum for pre-March 1997 members. The Union, on behalf of its affected members, while it accepts that the ongoing funding requirements of the DBPS pose a challenge to the Council’s finances, declined to accept this proposal and suggested two alternatives: (i) a reduction of the pension in payment annual increases to 1.5% and 2.5% respectively; or (ii) linking such annual increases to the Consumer Price Index. The parties failed to reach agreement at Conciliation before the Workplace Relations Commission and the matter was referred to the Court.
Recommendation
Having considered the parties’ submissions and their respective proposals for the resolution of the within dispute, the Court recommends that the Bar Council should take the necessary steps to ensure that future retired members of the DBPS will receive increases on future pensions in payment for a period of five years, from age 65 to age 70, of 3% per annum for post-March 1997 members and 5% per annum for pre-March 1997 members.
The Court so recommends.
Signed on behalf of the Labour Court
Alan Haugh
MN______________________
27th March 2018Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Michael Neville, Court Secretary.