Pensions problem must be tackled head on

ESB crisis over — now let’s resolve the private sector pensions crisis.

This time last week we were concerned about the looming and unnecessary industrial dispute which was due to commence on Dec 16.

As a day is a long time in politics, a day in industrial relations is equally as lengthy. That is particularly so when the implications are so horrendous for so many people in the middle of winter.

That the strike would happen during the time of ‘goodwill to all men’ just made it all the more ironic. Fortunately, wiser heads prevailed and a solution of sorts has been arrived at.

While we welcome the decision to withdraw the threat to shut down electricity generation, we should be conscious of a number of issues that have raised their ugly heads.

Some we had hoped had gone away. We wished others would just go away, or better still be resolved.

The issue behind the dispute centred on what appears to have been hamfisted decisions by ESB management. While it is understood that the ESB pensions fund is in a deep hole, it would now appear that it’s not quite as bad as it looks. Nobody is under any short-term threat that the pensions they expected will not be paid. The problem appears to be a medium- longer-term one.

ESB management appeared to have arbitrarily decided to change the pensions treatment in its accounts to one of defined contribution versus the defined benefit that the workers expected.

In anyone’s eyes that’s a serious no-no. Indeed, even after resolution of the strike threat, some bright spark in ESB management decided to ‘confirm’ they would still deal with the pensions scheme in the accounts as a defined contribution pension and that there would need to be no additional funding provisions made.

The unfortunate downside was the threats issued. Some on the union side effectively implied they would bring the country to its knees irrespective of who was hurt. That was something we thought had gone away a long time ago.

The other issue was the personal death threats allegedly issued to union leaders and their families. That represented a new low.

The one real positive was that the pensions issue was writ large. Government, both this one as well as its predecessor, have been avoiding the issue.

Resolving the looming pensions timebomb is projected as costing hundreds of billions as more people live longer. Yet rather than tackle the issue, the Government is kicking the can down the road, hoping it becomes somebody else’s problem.

As David Begg of Ictu said, we need a summit as pensions are behind a growing number of disputes. In the last few weeks, we had Aer Lingus management threaten employees with legal responsibility for any losses created by a dispute foisted on the airline because of the big hole in its pension fund and that of the DAA.

Kieran Mulvey, chief executive of the Labour Relations Commission, said that “workers need certainty as to their pension entitlements and whether they are getting good value for money. This is not an unreasonable request.”

Yet the Government continues to gouge more and more money from our pension pots. Our savings are losing value by the day.

I have recently heard people speak of how their pension projection is even more vastly reduced from what it should have been. In one case, the expectation was in excess of €30,000 per annum and they will be lucky to get €15,000 when all of the implications of recent government policies are taken into account.

What ‘nuclear weapon’ do we in the private sector have to ensure that government listens to us? It’s obvious only threats work.

business@examiner.ie


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