SIPTU employees facing pension cutsTuesday 25 February 2014 21.50
Current and former employees of SIPTU, Ireland's largest trade union, are facing cuts of up to a fifth in their pension benefits under proposals to address a €103m deficit in their pension scheme.
The move comes as SIPTU prepares to take strike action at Aer Lingus and the Dublin Airport Authority over moves to cut pension benefits of employees at those companies due to pressure on the aviation pension scheme.
The proposed cuts for SIPTU employees are outlined in a memo to members of the union's pension scheme circulated this month on behalf of the trustees of the scheme.
The memo confirms a proposal to cut the entitlements of current and former union employees who have not yet retired by 20% because the scheme fails to meet the regulatory minimum funding standard.
It also notes that the "vast majority" of those who have retired have signed an undertaking that in the "unlikely" event of the SIPTU pension scheme winding up, a reduction of 10% will be applied to pension amounts.
However, further cuts for pensioners could be in prospect when the Pensions Board gives guidance on how new legislation on cutting the benefits of pensioners could be applied.
The trustees also warn that it is unlikely that funding levels in the scheme will recover to a point that would permit restoration of benefit cuts.
They point out that if the restructuring proposal is approved by the Pensions Board, pensioner members will no longer receive automatic increases to their annual pension amounts.
However, SIPTU says that it will look at the possibility of discretionary increases depending on the performance of the fund.
SIPTU sources confirmed that the benefit cuts had been proposed, but noted that the changes would at least preserve the defined benefit scheme.
They also noted that there would be no cost imposed on SIPTU's members to address the deficit in the union's pension scheme.