Retired members of CIÉ’s 1951 Superannuation pension scheme have been told it will be at least the middle of 2024 before they receive any increase to their pensions but that the High Court case between the scheme’s committee and the company remains “the elephant in the room”.
About 100 of the roughly the 2,200 retired staff who were primarily supervisory, technical, administrative and managerial grades were told by CIÉ head of group human resources Aidan Grogan that while the fund, which was €150 million in deficit at the end of 2020, is now fully funded in terms of the regulatory minimum funding standard, the group board’s recent decision not to grant a first increase to pensions since 2008 had been influenced by the risk attached to the High Court action.
Solvency
The case, which was heard over four days in May 2022, focuses on the legal interpretation of rule 20 of the scheme, which relates to the employer’s obligations “to support and maintain the solvency of the fund”.
Mr Grogan told a meeting of the members’ association on Thursday the scheme had done “very well” in the last three years but the case had involved the court being asked to decide “what does solvency mean ... does it mean the minimum funding standard or does it mean the ongoing funding standard by which we fund the scheme. That’s with the High Court and we haven’t a judgment yet. I was here last year and we were expecting something but it’s been almost a year and a half now, and it’s unnerving to see it going this long.
“The board made a decision that there is uncertainty there because if the court rules that CIÉ should fund the scheme on the minimum funding basis, that could be hundreds of millions of euro if there was another financial crisis and there’s too big a risk in that for the board.”
He said that the board had considered several factors in June of this year when deciding whether pensions should finally be increased again after such a long period. One, he said, had been the performance of the fund but that the advice its members had received had been there was “insufficient headroom” to approve an increase in benefits.
The more significant factor, he suggested, however, was “uncertainty associated with the court case”.
No date has been given for a decision in the case but it is listed for mention in two weeks’ time.
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One of several pensioners to address the meeting from the floor was applauded when he said, “the board has let us down badly and should be ashamed of themselves”.
The trade unions representing staff at CIÉ also came in criticism for what was described as a lack of urgency on the issue as it affected retired members.
Another speaker suggested the problem was the group lacked “political clout”.
Wages
Members of the scheme are not entitled to State pensions or other benefits including the fuel allowance and association committee member Bernie Tierney told the meeting many members were struggling with the increased cost of living.
In the period since the last increase to the pension, the meeting heard, wages at CIÉ had increased by between 25 and 30 per cent, the State pension had increased by about 24 per cent and the consumer price index had gone up by nearly 22 per cent.
Ms Tierney cited the example of 72 female pensioners who retired prior to 2002 and were receiving benefits averaging €911.32 per month, more than €200 less than they would receive if they were able to switch to the State benefit.
