Inaction on pensions is utterly inexcusable

No meaningful action has been taken to confront much less resolve the pensions’ crisis, betrayal and inequity facing hundreds of thousands of workers and their dependants.

Unfortunately, an increasingly dire situation has been exacerbated by Government inaction other than to impose levies on private sector pension funds irrespective of their viability. Rather, the inequities across the pensions landscape have been epitomised by the fact that public sector employees have been spared any comparable imposition.

The issue has not gained any political or social traction but when many of the workers who expect to retire in the next decade or so, those who imagine they will have a basic retirement income, realise that they are facing an income collapse — poverty compared to the standards they enjoy today — then it will be too late.

The issue is at the root of industrial uncertainty at the ESB and the strike proposed at Dublin, Cork and Shannon airports next Friday. In a new twist the Dublin Airport Authority (DAA) was yesterday granted leave to seek a High Court injunction against Siptu’s plans to disrupt air services.

This is not the first time — and it certainly will not be the last — the issue has reached the courts. It is almost a year since the European Court of Justice found in favour of Waterford Crystal workers who took a case against the State for the loss of their pensions when the company went bankrupt. Luxembourg found that under EU law the State had to protect workers’ pension entitlements if a company became insolvent.

It seems there is no law to prevent a solvent, profitable company closing a defined benefit scheme to boost profits irrespective of the impact that decision will have on their employees’ retirement or the obligations entered into with those employees. This option must be removed.

The role of pension providers, fund managers and banks in this debacle deserves far more forceful attention too. Just as mortgage providers have been forced, albeit kicking and screaming, to accept some of the consequences of their lending recklessness and regulatory indifference by rearranging mortgages the same principle should apply to disastrous pension fund management.

There does seem to be scope for some kind of class action against the Government and the pensions’ sector for the kind of appalling regulation, oversight and performance by fund managers. It may be a case, as the New Beginning movement has shown in a very similar context elsewhere, of generating the critical mass needed to force action. Government refusal to appoint a pensions minister tells its own story and shows where alliances may lie. The recent Davros conference considered the widening wealth gap around the world and the pension smash-and-grab is just another manifestation of that trend.

Of course it is all too easy to dismiss this as a generational issue that can be ignored until it goes away. Not so. Many of those young families dependent on their parents to make ends meet today face a double whammy. When their parents retire the process will reverse because they will not be able to live on their pensions. The prospect is indeed that grim and current inaction is inexcusable and incomprehensible.