Pfizer in €31.5m pension ruling

Pfizer in €31.5m pension ruling

By Gordon Deegan

The Labour Court has recommended drug giant Pfizer’s 900 strong workforce each receive lump payments of up to €35,000 to compensate for it freezing its defined benefit pension schemes.

The court has made its “comprehensive” recommendation in the long-running dispute between the US company and Siptu, and the Technical, Engineering and Electrical Union (TEEU).

If the terms of the Labour Court recommendation are accepted by workers across four sites, Pfizer could face a maximum bill of around €31.5m to fund the lump sum payments.

In its recommendation, the Labour Court said that an initial lump sum payment of €10,000 be made after June 30, when workers would have the option of receiving the payment through payroll or on a tax-free basis to their pensions.

The Labour Court has also recommended an additional lump payment to include €1,700 per year of service up to a maximum of €25,000 which would be paid to the workers’ defined contribution scheme.

The proposal by Pfizer to freeze its defined benefit scheme has been strongly resisted by unions over the past four years since the plan was first proposed in 2014.

In their arguments before the Labour Court, Siptu and the TEEU said they opposed changes to the current defined benefit pension scheme at the company.

The unions said the pension scheme was “an integral part” of the agreement with Pfizer.

In response, Pfizer said it was forced to make the change “to address the unsustainable cost and exposure” of the defined benefit schemes “which impact negatively” on Pfizer and “the cost competitiveness of Irish operations”.

Pfizer said the cost to the company of funding the defined benefit schemes had “risen 1,000% since 2009”.

The Labour Court said it commissioned independent actuaries.

A spokeswoman for Pfizer said the defined contribution scheme which would replace the defined benefit scheme was “above market average, with very attractive transition incentives and with strong contributions from the company”.

“The company is reviewing and considering the recommendation of the court,” she said.

A Siptu spokesman said: “Until our members fully consider the Labor Court recommendation, the union will not be commenting any further.”

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