Irish pensions reform 'inevitable' after Waterford Crystal ruling
IRELAND – Pension reform in Ireland in the wake of the Waterford Crystal case is “an inevitability”, the general secretary of the union IBOA has said.
Detailing the union’s concerns over a lack of security for active and deferred members once a defined benefit (DB) scheme is wound up, Larry Broderick said the Irish Congress of Trade Unions had recently written to the Ireland’s Taoiseach and Tánaiste – Enda Kenny and Eamon Gilmore, leaders of the governing coalition parties – to express its concerns over the shape of pension regulation in the country.
Broderick noted that large numbers of DB scheme members were either active or deferred – meaning that, on wind-up, their benefit payments are dealt with once retired members benefits have been fully covered – and that this was of particular concern.
“[There is a] huge concern that, in relation to what’s developing generally in the industry, employers are using this vacuum to proceed with winding up pension schemes, which has huge implications for active members in general,” he said.
However, Broderick seemed hopeful of progress in the wake of the Waterford Crystal ruling by the European Court of Justice.
The court found the Irish government had failed to adequately protect the pension benefits of workers from the insolvent glass manufacturer – and that at least half of accrued rights should be honoured, which may require the introduction of a pension protection arrangement.
“There is an acknowledgement by the government now,” Broderick said. “And, in terms of their response to the Waterford Glass decision, there’s an inevitability as to what they have to do.”
He also spoke of the need to postpone the looming deadline to submit funding proposals to the Pensions Board – due at the end of the month despite last-minute changes to the list of assets schemes can use to offset risk reserve requirements.
Responding to mention of a pension protection scheme and how its introduction would likely require the introduction of ‘debt upon the employer’ legislation considered onerous for companies, Broderick said: “We would hope the government, by virtue of its commitment to talking about implementing this, could use moral persuasion on employers to recognise this is something in the best interests of everybody concerned.”