FULL RECOMMENDATION
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : NEW BOLIDEN TARA MINES LTD (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION DIVISION : Chairman: Ms O'Donnell Employer Member: Ms Doyle Worker Member: Ms Tanham |
1. Pension Scheme Terms.
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 9th of January 2019 in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on 21st of March 2019.
UNION'S ARGUMENTS:
1. The Unions' position is that all workers were guaranteed a minimum value of 107% as set out in the correspondence that issued to the workers in advance of the ballot in late 2015.
2. The Unions in their submission refer to a letter dated 27th of January 2015 which states that as and of the 31st December 2015 "the value of the fund as of that date gives you a transfer value of 107% of the benefits made by the trustees in 2015". The Union argue that the date of issue of the letter the Employer would have been aware that because of the volatility of the market the transfer value had gone down from what it was on the 31st December 2015 and the letter should have reflected that.
EMPLOYER'S ARGUMENTS:
1. The Employer's position is that 107% was an indicative figure and not a guaranteed figure and the letter clearly states that the figure was as at 31st December 2015.
2. The Employer maintains that although not all workers received a value at the time of transfer of 107%, the Employer did pay the monetary equivalent of the December 2015 figure, which they believe is over and above what they had committed to pay.
RECOMMENDATION:
The issues in dispute between the parties relate to 1) the transfer value on moving to the new Defined Contribution pension scheme 2) voluntary access for member of the 2010 pension scheme to transfer to the new DC scheme 3) winding down of Defined Benefit pension scheme.
In late 2014 a joint Pension Review Group (Management/Union) was established to examine alternatives to a Trustee Funding proposal in relation to addressing issues with the Defined Benefit Pension Scheme. A set of proposals emerged from that process and was the subject of a ballot in late 2015. The proposals were carried by a small majority. An issue has now arisen in relation to the transfer value at the time that the DB scheme was wound down.
The Unions’ position is that all workers were guaranteed a minimum value of 107% as set out in the correspondence that issued to the workers in advance of the ballot. However, some workers on transfer got a value of less than 107%. The Employer’s position is that 107% was an indicative figure and not a guaranteed figure. The Unions in their submission refer to letter of 27thJanuary 2015 which states that as and of the 31stDecember 2015 “the value of the fund as of that date gives you a transfer value of 107% of the benefits made before the changes made by the trustees in 2015”.The Union argue that at the date of issue of the letter the Employer would have been aware that because of the volatility of the market the transfer value had gone down from what it was on the 31stDecember 2015 and the letter should have reflected that.
The Employers position is that the 107% value was an indicative figure and the letter clearly states that the figure was as at 31stDecember 2015. The letter went on to say, “this transfer value may change in the period between the 31stDecember 2015 and the date at which the DB fund is closed and the new DC scheme commences” the letter goes on to say,“the final value will not be known until the wind-up process has been completed and all members data has been finalised”.
It is the Employer’s position that although not all workers received a value at the time of transfer of 107%, the Employer did pay the monetary equivalent of the December 2015 figure, which they believe is over and above what they had committed to pay.
The Court understands that the majority of workers actually did receive a transfer value equal to or more than 107%. The Court having carefully read the submissions and listened to the oral submissions on the day does not accept that there was a guaranteed entitlement for every member of the scheme to get a minimum of a 107% transfer value at the time the scheme was wound down and therefore this element of the claim must fail. Moving on to the second issue raised by the Unions relating to members of the 2010 DC scheme being allowed access the new DC scheme on a voluntary basis. It is clear from the submissions of the parties that this would require a higher contribution level from the Workers concerned and the Employer and therefore it is unlikely that all the Workers in the 2010 scheme will wish to transfer.
The Court sees merit in opening the new DC scheme to members of the 2010 scheme for a limited period of time. The Court therefore recommends that access on a voluntary basis to the new DC scheme be available to members of the 2010 scheme for a period of three months from the date of this recommendation. In relation to the final issue arising from the winding down of the pension scheme which the Court understands to relate to the future funding element.
While reference in passing was made to this issue during the hearing, the Court did not get full submissions from the parties and therefore, the Court recommends that the parties re-engage on this issue with the assistance of the WRC if required.
The Court so recommends.
Signed on behalf of the Labour Court
Louise O'Donnell
CH______________________
15th April 2019Deputy Chairman
NOTE
Enquiries concerning this Recommendation should be addressed to Carol Hennessy, Court Secretary.