Pharmaceutical giant Pfizer has abandoned plans for the moment to phase out a Direct Benefit (DB) pension scheme for its Irish employees.
The company said it was "extremely disappointed" that after five years of negotiations staff at its plant in Ringaskiddy, Co Cork, had recently voted to reject a WRC proposal which would have led to the eventual phasing out of the DB scheme.
Pfizer maintained the WRC recommendations provided for a significantly above market average pension plan.
The firm informed staff at Ringaskiddy this morning and later issued a statement confirming "it is no longer looking to implement DB pension changes across the Irish operations at this time".
However, the company added that the issue of how to better manage the increasing costs, funding and volatility associated with DB plans and ensure the competitiveness of its Irish operations "remains a significant business challenge".
Pfizer has another plant in Little Island, Co Cork, which is currently being run by Upjohn.
While workers at Ringaskiddy rejected the WRC proposals, staff at Little Island voted to accept them.
Pfizer said Upjohn Manufacturing Ireland, the company which owns and operates the Little Island facility, will cease to be a subsidiary of Pfizer Inc. upon completion of the Mylan-Upjohn amalgamation.
This is expected to occur in mid-2020 and there may be separate discussions there in relation to pension arrangements.
In 2014, Pfizer proposed the introduction of a Direct Contribution (DC) pension scheme to replace non-contributory DB schemes.
This would be for future accrual only, and the company said it would continue to fund the existing DB schemes in accordance with its obligations.
Pfizer's current DB pension plans are non-contributory meaning that employees make no contributions towards their benefits.
Pfizer maintains this is very unusual in either the private or public sectors.
The proposed changes would have affected approximately 900 Pfizer employees involved in manufacturing, shared services and commercial operations.
The company had also promised that the changes would not affect deferred members or pensioners.
Pfizer said the cost to the company of funding the DB schemes has risen 1000% since 2009 and these costs were affecting the competitiveness of Irish operations.
Update 5.45pm: SIPTU representatives have welcomed the decision of Pfizer to maintain its Defined Benefit (DB) Pension scheme for workers at its facilities in Ringaskiddy and Little Island.
SIPTU sector organiser, Alan O’Leary, said: “SIPTU representatives have been involved in very difficult pension talks with senior management at Pfizer for several years. At all times we urged the company to continue to maintain our members existing benefits. We consistently advised the company that it was our strong view that maintaining good pension benefits for workers should be a top priority for all profitable multinational corporations.”
SIPTU organiser, Ray Mitchell, said: “While we must engage with Pfizer to clarify the detail of its decision as it relates to our members in the Ringaskiddy and Little Island facilities we are pleased that it commits the company to the retention of their core pension benefits.”