ESB management has been quoted by Industrial Relations News as saying the accounts, which are due to be released shortly, will describe the scheme as defined benefit and in a manner “consistent with the Labour Relations Commission agreement”.
That agreement was hammered out by the LRC in the aftermath of a threat by the ESB Group of Unions (ESBGOU) to hold significant strike action which would have plunged much of the country into darkness in the run-up to Christmas.
After the LRC recommendation, the ESB issued a statement in which it said: “The resolution of this issue protects the financial strength of ESB — there will be no additional liabilities on ESB’s balance sheet.”
However, this week, in a letter to ESB chief executive Pat Doherty and chairman Lochlann Quinn, solicitors for the group of unions, said: “In advance of the finalisation of the accounts and for the avoidance of doubt, our client has requested that we put ESB on notice of their position in respect of the appropriate accounting treatment of the scheme to ensure that the scheme is accounted for correctly by ESB in the annual accounts for the year ended 31 Dec 31, 2013.”
They said it is a statutory defined benefit pension, as agreed by all parties at the LRC, and should be defined as such in all future accounts.
The aspect which could cause controversy is the ESBGOU demand that the scheme be “balance of costs”. The solicitor’s letter said that was stipulated in Section 20 of the Energy (Miscellaneous Provisions) Act, 1995. It said an amendment to part of that act stated “the board shall from time to time make to the fund such payments as are determined by the actuary of the scheme”. Such payments would appear to add “additional liabilities” to the ESB’s balance sheet.
“We trust .... that the scheme is referred to as a defined benefit scheme and a balance of costs scheme in its accounts,” the solicitors wrote. “Any reference to the contrary in the accounts may constitute a misrepresentation. In the circumstances our client reserves all of its rights and entitlements and those of its members to take such steps as may be necessary to protect their position which may include the institution of legal proceedings.”