Funding crisis must be faced: Weak laws hit workers’ pensions

THE appalling, dishonourable decision by the profitable Independent News and Media (INM) to close its defined benefit pension scheme is another indication of how government after government has dodged its responsibilities. 

The decision, one close enough to corporate piracy, is another of the thousand cuts driving disconnected politicians from office all around the world. Political inaction beckons social mayhem. By inaction, or, more correctly, deliberately letting the pensions’ hare sit, government after government has put the interests of employers and the financial sector well ahead of the legitimate expectations of those who funded a pension over a long working life. This situation was recognised through a EU directive 13 years ago but that workers’ safeguard remains unenacted here. Why? For whose benefit? That legislation secured a hard-won victory in European courts for Waterford Crystal pensioners who fell prey, unlike their British Wedgewood colleagues, to inadequate Irish legislation.

INM, where pre-tax profits rose by nearly 30% to €37.4m last year, could not pull this stunt in Britain because it would be illegal. There solvent companies must cover pension fund deficits before a scheme can be wound up. The INM scheme has a regulatory deficit of €23m — €14m less than its pre-tax profits last year. This legislative “oversight” will have a profound impact on the 400 employees who, when this latest blow is combined with a 2013 pension deal INM welched on, face pension cuts of 70%. It is not necessary to dwell for too long on what might happen if a 70% pension cut was imposed on, say, gardaí, teachers, nurses or, god forbid, civil servants and politicians. The country would grind to a halt within days if not hours. This reality underlines the pension apartheid driven by government inaction.