State urged to protect Wedgwood pensions
Employee representatives and the Irish Congress of Trade Unions, had an hour-long meeting with Mary Coughlan yesterday to detail their concerns and ask the Government to step in to protect their interests.
Efforts are ongoing to find a buyer for the factory after its parent company Waterford Wedgwood went into receivership last week but it is expected that many of the 800 jobs here will be lost.
Workers facing the prospect of redundancy fear a double blow as their pension fund is over €100 million in debt and they see little chance of it recovering to honour their pension entitlements.
The Unite union which represents the workers said a number of proposals were put to the Tánaiste, including the creation of a State-backed fund to protect workers’ pensions contributions. A spokeswoman for Ms Coughlan said she would brief the ministers for finance and social and family affairs on the issues raised.
Social and family affairs minster Mary Hanafin insisted last week that ministers would not intervene to protect any private sector pension fund but some pensions experts have warned that the Government could be in breach of EU law if they don’t take action.
The view is based on a 2007 ruling by the European Court of Justice which found that the British government had a duty to compensate workers whose pension fund went bust. The European court did not specify how much compensation should be paid, referring the matter to the British high court to determine, but some observers believe it set a precedent that could be applied here, particularly as Ireland has no state protections for pensions while Britain now has a pension protection fund.
One industry source said it was only a matter of time before the European ruling became an issue for the Irish Government. “I would find it very hard to see how the Government could say that they have no responsibility in this area. I don’t think there would be any way out for the Government if the ruling was taken up here.”
The idea of setting up some form of pensions protection scheme has been pushed by the unions for a number of years but has become more urgent since the disastrous performance of pension investments over the last year.
A leaked report from minister Hanafin’s office last month warned that private pension funds in Ireland were collectively €20-30 billion in debt and that 90% of defined benefit schemes would not meet legal solvency requirements when they filed their next financial statement with the pensions board.
The idea is backed by the independent Think-tank for Action on Social Change (TASC) which called for the creation of a statutory pension protection fund.
Meanwhile, 367 of the 1,868 workers in Waterford Wedgwood’s British operations were told yesterday their jobs were gone and further cuts are expected.
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