Glanbia retirees vow legal action over non-payment of pension hike

A group of 40 Glanbia group retirees is threatening legal action against the company over non-payment of a 3.5% pensions increase which they say was agreed in advance of their retirement.

Glanbia says it has not received any legal notice. Overall, there are 2,654 members in Glanbia’s main defined benefit scheme — 903 are employees, 1,015 are deferred members and 736 are pensioners.

The 40 disputing pensioners, whose average age is in excess of 71, are former management and technical personnel with Waterford Foods, which joined with Avonmore in 1997 and formed Glanbia plc.

In 1992, when Waterford Foods faced a 4% wage claim by its workforce, its managers agreed to forego this wage increase in return for enhanced entitlements when they retired.

A spokesperson for the pensioners’ group said: “We had a contractual agreement dating back to 1992 assuring us that in forgoing a 4% pay claim at the time, we would get an annual 3.5% improvement in our pensions after we retired.

“The company honoured that contract from 1992 until January of this year. However, now they are saying that they will not pay us this annual increase. We have been let down by a company to which many of us gave our whole working lives.”

In reply, Glanbia said it had a significant pension deficit in its main defined benefit pension scheme, to the tune of €200m.

Glanbia stated: “In order to ensure the sustainability and long-term viability of this pension scheme, in agreement with the pension trustees and in consultation with all members and their union representatives, Glanbia undertook a strategic review of its pension arrangements.

“The group subsequently received approval from the Pensions Board for revised funding approval dealing with the deficit over 10 years. This was achieved through a combination of benefit reductions for all members as well as a significant increase in the employer contributions,” the company added.

Glanbia said that the implications for members' benefits included the removal of future guaranteed increases to pensions in payment for all members (employees, deferred members and pensioners); and the introduction of career averaging for the calculation of future pension benefits for employed members.

This new pension deal also included a substantial increase in the company contributions to the main scheme to €14m per annum, increasing in line with price inflation.

The spokesperson for the pensioners’ group cited a letter of September 1992 in which the company stated: “Pensions will increase in the course of payment at the rate of 3.5% per annum compound from the date payment commences.”