Pen­sion is­sues set to fur­ther com­pli­cate Ir­ish Rail dis­pute as new strike ‘ex­tremely likely’

Sunday Independent (Ireland) - Business & Appointments - - FRONT PAGE - Fearghal O’con­nor

A LOOM­ING is­sue over pen­sions is set to fur­ther com­pli­cate the in­dus­trial re­la­tions im­passe at Ir­ish Rail.

A strike at the com­pany is “ex­tremely likely” in the com­ing weeks, ac­cord­ing to trade unions, af­ter talks over work­ers’ de­mand for a 3.75pc pay rise came to a halt.

Now, a se­cret memo pre­pared on be­half of staff — seen by this news­pa­per — claims a wors­en­ing sit­u­a­tion in the pen­sion fund will be used by man­age­ment to ar­gue that the com­pany faces a threat of in­sol­vency.

Po­ten­tial in­sol­vency was cited by trans­port man­agers dur­ing pre­vi­ous strikes at both Dublin Bus and Bus Eire­ann as rea­sons to cur­tail pay be­fore deals were even­tu­ally reached — but not be­fore com­muters suf­fered huge dis­rup­tion to their travel plans.

“We have CIE is­su­ing warn­ings of doom on the is­sue of the pen­sion scheme... Again, we have the spec­tre of in­sol­vency with CIE say­ing that they also are on the verge of in­sol­vency,” said the memo.

“The com­pany ac­counts re­fer to ‘ fair value of as­sets’ for the pen­sion scheme, whereas what is be­ing done to the as­sets is ul­tra con­ser­va­tive ac­count­ing pol­icy, and it is hard to con­sider it a ‘fair value of as­sets’.

“Ev­ery­where we look the pen­sion scheme is be­ing por­trayed in the worst man­ner pos­si­ble.”

The memo crit­i­cised a change in in­vest­ment pol­icy with high earn­ing eq­ui­ties swapped for much lower re­turns from cash and Ger­man bonds.

“The strat­egy here ap­pears to be to move the as­sets from ar­eas where we get a re­turn to ar­eas with no re­turn; the scheme will be un­able to earn money like it did in 2016, so CIE will be able to say the scheme is not vi­able,” it said.

It also crit­i­cised a low­er­ing of the dis­count rate — used to al­lo­cate the cost of fu­ture ben­e­fits over time. The memo claimed this had driven up the level of li­a­bil­i­ties in the fund.

A com­pany spokesman said changes to pen­sion pol­icy were an ac­tu­ar­ial, rather than a com­pany, de­ci­sion and that changes last year had ac­tu­ally ben­e­fited the pen­sion.

Meet­ing the min­i­mum fund­ing stan­dard was the key rea­son for the cur­rent process around the pen­sion, he said.

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