LCR21874

• 3 The Unions want the CRC to address future losses suffered by active members.

The within dispute concerns matters arising from the winding-up of the Central Remedial Clinic Pension and Death Benefit Plan (‘the DB Plan’) in May 2016. The Unions represent some forty-four individuals who were Active Members of the DB Plan when it was wound up.

As of 16 May 2016 (‘the Wind-up Date’), the DB Plan’s liabilities exceeded its assets by some €2,000,000.00. Between December 2008 and December 2012, the Central Remedial Clinic (‘the CRC’) had made a series of lump sum payments to the DB Plan totalling €6,335,708.00 to address the Scheme’s ongoing deficit. From 2011 onwards, employee and CRC contributions were at 10% and 25% respectively of pensionable salaries. In April 2016, Mercer prepared a report on the operation of the DB Plan which indicated that – despite the extensive efforts that had been made to address the funding of the Scheme – it remained in financial difficulty. Management of the CRC, acting on foot of Clause 15 of the Trust Deed, made a decision to issue the Trustees with a Notice of Cessation so as to pre-empt any demand from the Trustees for additional payments to the Scheme which the CRC would not have been in a position to make. Were the CRC to be put in a position of having to make additional payments to maintain the funding of the DB Plan its ability to continue to provide services would have been severely jeopardised. It is a source of considerable difficulty for the Unions that CRC Management chose to make this decision without any prior engagement with the Unions.

Those who were Active Members on the Wind-Up Date were subsequently admitted to a State-guaranteed final year defined benefit plan (the VHSS), with no loss of pension coverage. The Unions acknowledge that this is an excellent scheme notwithstanding that the death-in-service and income continuance benefits thereunder are not as favourable as those previously available to their members under the DB Plan.

The Unions are seeking the following recommendations from the Court:

• 
  •That the Central Remedial Clinic (‘the CRC’) makes Bridging Payments (amounting to some €6,638,488.00) to equalise accrued and future losses for Active Members and accrued benefit losses for Deferred Members;

  •That the CRC maintain death-in-service and income continuance benefits for those affected members who are still in employment at the same levels that previously applied under the DB Plan.

Recommendation

The Unions’ request for so-called Bridging Payments of some €6,638,488.00 is not realistic having regard to the considerable sums previously paid by the CRC into the DB Plan and to the CRC’s funding model. As matters transpired, those who were Active Members of the DB Plan on the Wind-Up Date have been transferred to membership of an excellent State-guaranteed pension scheme which provides comparable pension benefits in many respects with no loss of pension coverage. Nevertheless, it is regrettable that the CRC took a decision in May 2016 that undoubtedly had significant implications for everybody associated with the Scheme without first engaging with the Unions. In that context, the Court recommends that the Parties should re-engage in relation to the issues of death-in-service and income continuance. If they are unable to reach agreement, the matter may be referred back to the Court for a definitive Recommendation.

The Court so recommends.

Signed on behalf of the Labour Court



Alan Haugh
MK______________________
15 January 2019Deputy Chairman



NOTE

Enquiries concerning this Recommendation should be addressed to Mary Kehoe, Court Secretary.