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