SIPTU flout standards ‘regressive to pensions’

THE country’s largest trade union has decided to deliberately flout accepted accounting standards in its latest annual report, claiming the rules are regressive for pension schemes.

SIPTU’s accounts, which will be registered with the Register of Friendly Societies today, show the union recorded an income of €36.9 million in 2005, more than €35m of which was funded by member contributions.

The union has always argued that international accounting rules adopted by Irish accountants since 2002 are inappropriate and damaging to defined-benefit pension schemes.

The standard, known as Financial Reporting Standard 17 (FRS17), requires companies to present an accurate assessment of all assets and liabilities, including any pension-related obligations.

SIPTU has a €31m deficit in its pension scheme and has structured a 15-year plan, approved by the Pensions Board to make up the deficit.

However, the union’s annual accounts for 2005 will argue that the FRS17 standard is “not in the best interests of defined-benefit pension schemes” and is “contrary to the union’s objective of supporting the continued provision of defined-benefit schemes by employers”.

In a statement last night, SIPTU general secretary Joe O’Flynn said it would be misleading to present the union’s pension fund performance on the basis of a single year.

Mr O’Flynn said the standard threatened the “independent status of pension scheme accounting” since it created “an inappropriate link with the financial affairs of individual enterprises with the implication that the funds held in a pension scheme may be considered as part of the enterprise — rather than as an independent source of finance for employees’ pension cover”.