Unions should campaign for pension rights

YOUR report from the ICTU conference in Bundoran headlined ‘Young workers are conned over pensions’ (July 7) was most timely.

I particularly support the comments by Eamon Devoy, the TEEU leader, when he called on the trade union movement to launch a nationwide campaign to defend occupational pensions. The move away from defined benefit to defined contribution pension schemes, which puts all financial risk on the shoulders of employees, is unwelcome. As pension is deferred pay, this move is a very real pay cut.

The assets of companies are now being calculated on their present value rather than, as heretofore, on their projected future value.

This enables companies to plead that they are not able to afford the same level of pension provision.

This method of asset calculation, if applied to the housing market, would suggest that a house that is worth €300,000 today would be worth the same amount in 40 years’ time.

A deterioration in pension entitlements is not confined to private sector employees.

Since April 1, 2004, new employees in the public sector are obliged to contribute to a completely different pension scheme with greatly reduced entitlements compared with those employed previously and this was brought into effect without any public debate.

Furthermore, many retired employees in both the public sector and semi-state bodies have not received all the increases paid to serving members. The increasing emphasis on productivity enables the State to plead that those who are retired were not as productive as current employees.

These retirees worked for reasonably modest salaries on the understanding that, while they were not entitled to a State pension, they would have pension parity on retirement, but this is now being eroded.

At a recent pension convention attended by public and private sector unions and financial institutions, I was interested to learn that the cost to the State of public service pensions is €2 billion annually while it costs the State €2.lbn to subsidise private sector pensions.

I fully support tax incentives for pension provision and believe that those in both the public and private sector should have adequate pension cover.

The trade union movement should be congratulated for raising this issue and attempting to prevent the ongoing erosion of pensions in both the public and private sectors.

Bernadine O’Sullivan

Chair

ASTI Pensions Committee

131 Fortfield Road

Terenure

Dublin 6W