STAFF AT Bord na Móna will today decide on a radical overhaul of company pension schemes – just over a year after a similar proposal was rejected by trustees of one of the schemes.
Craft workers, who are members of the Regular Workers’ Employee Superannuation Scheme (RWESS) are voting on whether to allow white-collar colleagues from the General Employees’ Superannuation Scheme (GESS) transfer to their scheme.
The move comes as Bord na Móna struggles to cope with the cost of its defined-benefit pension provision for staff.
The GESS scheme has been struggling with deficits since 2003 and has failed in that time to meet the minimum funding standard laid down by the regulator, the Pensions Board.
Staff were informed that the deficit had ballooned to more than €45 million at the end of 2008, more than €30 million worse off than a year previously.
As recently as March of last year, the RWESS scheme had a surplus of €31.6 million. However, its position has also deteriorated since then, with a deficit of €7.8 million at the end of €2008.
By April, Jim Stockwell, the group head of human resources, reported that the combined deficit of company pension schemes was “now over €70 million”. Bord na Móna chief executive Gabriel D’Arcy and his management team have spent the past three years trying to organise a merger of the two schemes as part of a broader effort to close its defined-benefit pension schemes to new members.
In an effort to secure approval from members of the RWESS, who are generally lower-paid craft workers, it developed a formula designed to ensure that people would receive at least 20 per cent of their final salary in retirement in addition to the State pension.
Up to now, some workers have received a negligible occupational pension despite years of making contributions to the scheme. Unions voted to approve a merger of the two schemes early last year after protracted negotiations.
However, the plan subsequently foundered when trustees of the RWESS declined to approve the proposal following independent advice.
Concerns were expressed by some staff about the risk of taking on board members of the deeply indebted white-collar scheme, with a number arguing that such a move would reduce the viability of both schemes over the long term.
Trustees are obliged by law to act in the best interests of their members. Failure to do so can see them held personally liable.
Some continue to doubt whether allowing the transfer of white-collar workers is in the long-term benefit of existing members of the RWESS scheme.
Votes in the ballot will be counted today in Tullamore.
However, the ballot itself has drawn criticism from some employees. They are unhappy that seasonal staff who are not members of the scheme have been granted votes in the ballot while retired members have not been balloted on the plan.
They also claim that information critical to the proposal was circulated to members after some had already cast their votes.
