State cannot afford €13bn pension bill for insolvent firms, Crystal case hears

THE economic crisis and terms of the EU/IMF bailout mean the Government cannot commit to pay the estimated €13 billion actuarial cost of providing a state guarantee of the full pension entitlements of workers in cases of employer insolvency.

Kevin Cardiff, secretary general of the Department of Finance, made the assertion in the Commercial Court in a witness statement in proceedings in which 10 former workers with Waterford Crystal allege the state has failed to meet its obligations under an EU directive — the Insolvency Directive — to “protect” workers whose employers become insolvent.

Mr Cardiff said it was not possible for the Government to guarantee either the €13bn actuarial cost of full pension entitlements in insolvency situations or the lesser — unspecified — cost of paying less than 100% of the entitlements of persons still working at the time of insolvency.