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EC to raise insolvency issue with Irish gov't

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  • EC to raise insolvency issue with Irish gov't

IRELAND/EUROPE - Trade union representatives for SR Technics workers have been told the European Commission will "shortly" be raising the issue of pension protection, when a scheme is wound up in deficit, with the Irish government.

A delegation from the Services, Industrial, Professional and Technical Union (SIPTU) travelled to Brussels to meet with Vladimir Spidla, European Commissioner for Employment, Social Affairs and Equal Opportunities, and other senior officials to discuss the failure of SR Technics to address the estimated €26m deficit in its defined benefit pension fund, even though the company is solvent. (See earlier IPE article: Labour Court tells SR Technics to fund deficit)

The representatives, including  an SR Technics worker, Denis Dennehy, who will not receive his full pension as the scheme wound up just weeks before he retired, used the opportunity to ask the Commission to "investigate the inadequate protection provided for workers generally".

SIPTU claimed the actions of SR Technics had highlighted defects in "the light touch regulation of occupational pensions", and following meetings with senior Commission staff dealing with pensions and the insolvency Directive the union claimed they were told, "the Commission would be raising the issues with the Irish government shortly".

Pat Ward, branch organiser at SIPTU, said: "We explained the situation facing SR Technics workers, where the company was being wound up and the owners were being allowed to walk away from a €26m deficit in the pension fund, even though it is a solvent enterprise."

SIPTU pointed out that the Insolvency Directive "was supposed to offer some level of protection to workers in this situation", and confirmed it had used Waterford Crystal to illustrate situations where "employees were left totally exposed by the collapse of the company". (See earlier IPE articles: Irish gov't urged to extend Pension Board powers and Unions to sue gov't over Waterford pension collapse)

Michael Halpenny, head of the legal rights unit at SIPTU, argued the UK government "was found to be in breach of the Directive by the European Court of Justice  (ECJ) in another insolvency case recently, even though it provided significantly more protection for workers than they enjoy here", while he added the Pensions Regulator (TPR) in the UK has the power to make a solvent company that is being wound-up fund a pension scheme deficit.

Halpenny said: "This defect in the light touch regulation of occupational pensions has been starkly illustrated by the SR Technics situation, where the extremely wealthy owners can walk away and leave employees like Denis Dennehy stranded."

"This situation where workers paying contributions all their working lives can be left totally exposed because the government never bothered to put in place safeguards that exist in other EU member states cannot be allowed to continue. Ultimately it could cause social havoc, pauperising people who had worked hard all their lives," he added.

If you have any comments you would like to add to this or any other story, contact Nyree Stewart on + 44 (0)20 7261 4618 or email nyree.stewart@ipe.com

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