Clare Daly urges action over Central Remedial Clinic pension closure

The decision by the Central Remedial Clinic (CRC) to unilaterally shut down a pension scheme for its employees will be replicated in the State's remaining defined benefit schemes, unless there is Government intervention.

Independents 4 Change TD Clare Daly urged Minister for Social Protection Leo Varadkar to intervene because he has responsibility for pension schemes' governance and there was an "astounding" lack of governance with the CRC scheme.

She said one of the employees with just weeks to go before retirement at the CRC had worked there for 44 years while another had 30-plus years there and they now had no pension and “zero consultation”.

She told Mr Varadkar: “It does need your intervention now Minister to say ‘freeze this scheme now’. Don’t allow them to go ahead with that decision and have a serious investigation into what’s going on.”

Ms Daly asked why there was such a clamour and rush to shut this scheme down. “There is documentation which says that that was being done deliberately to deny consultation to the pensioners, which is completely against pension authority rules.”

Calling on the Minister to undertake a “root and branch review” of pension governance in Ireland, she warned the State was on the cusp of a “serious, serious problem” of which the CRC was just one case.

The Dublin Fingal TD was speaking during a late night debate on Social Protection estimates.

She said the funding proposals were on track in December 2014, went slightly off track in 2015 “but only to the tune of a couple of hundred thousand” and yet the scheme was subsequently “unilaterally shut down without consultation”.

She said that every day since then the CRC is saving substantial amounts of money at the expense of pensioners.

Ms Daly highlighted the CRC’s controversial history when it came to pensions.

In 2014 the departure of former CEO Paul Kiely cost the CRC €750,000 in pension payments. The organisation, which provides a variety of services to people with disabilities, attempted to cover this up, she said that this led to the resignation of that board.

“Now we have another pension scandal at the heart of the CRC under a new board and new management and the staff have been treated abysmally.”

Outlining pension scheme statistics, Ms Daly said Ireland’s pension system was made up of 150,000 schemes with over 730,000 active members holding more than €80 billion in investment assets. There were over 226,000 individual PRSA contracts with over €4.6 billion in investment assets.

She said this was “absolutely huge” and “totally not transparent and not accountable”.

“How in an area where we’re supposed to have governance could that have happened, with no new pension plan in place?” she asked.

The TD also hit out at Mercer’s, the company that provided administration, actuarial and consultancy advice to the CRC plan, while at the same time being the trustee of that plan. She said the Irish Pension Trust is owned by Mercer.

“Not only that even more astounding the CRC decided to hire late last year another Mercer person to give them another separate advice. The previous fellow who was in there had already given the CRC pension scheme advice.”

They were obliged to get independent advice.

“This is one that deserves your further scrutiny because there are organisations giving advice on our pension schemes that are appearing and popping up on all sides of the balance sheet, giving advice to both sides and it is pensioners who are losing out in that situation.”

But according to the Pensions’ Authority, “pension fund trustees are supposed to be looking after the savings on behalf of hundreds of thousands of people”.

She told Mr Varadkar that giving the ageing population and the demands on the exchequer, this issue would come to his doorstep.

He had responsibility for governance and these pensioners would be coming to him, people who paid into a scheme all their life and then “there is nothing for them”.