Today in the pressThursday 25 April 2013 09.14
PTSB AND AVIVA BECOME LATEST TO SHUT DOWN DEFINED BENEFIT SCHEMES - Two financial services groups have become the latest to announce the closure of their defined-benefit schemes as funding pressures and strict rules mean more companies are turning their backs on traditional retirement schemes. Permanent TSB is to stop paying into its defined-benefit plans - which means three schemes with 2,000 members will be wound up. The deficits amount to €300m. Staff will be moved to a new defined-contribution (DC) scheme from June 1, the Irish Independent has learned. The bank is to contribute 12% of staff salaries into the new DC plan. The move to stop contributions to the defined benefit (DB) scheme will save it €10m a year. A letter to the UNITE union from the bank states: "Based on actuarial advice, the group has come to the conclusion the DB schemes are no longer viable, given its inability to meet the minimum funding requirement of the Pensions Act." Insurance company Aviva also plans to close its defined-benefit pension scheme in Ireland next month with the backing of union UNITE. Staff will move to a new DC pension from the start of next month, an Aviva spokeswoman confirmed. Promised benefits under the DB scheme will be reduced. The scheme had been closed to new staff members since 2001. The plan had a £371m (€436m) deficit at the end of last year. Some 93% of UNITE members voted to close the plan, Aviva said.
EIRCOM STAFF REAP ALMOST €1 BILLION TAX FREE SINCE 1999 PRIVATISATION - About 14,000 current and former employees of Eircom will have shared €980 million in tax-free payments by the time the employee share trust (Esot) is formally closed around the middle of this year, writes the Irish Times. This will bring the average tax-free distribution to the trust members to €70,000. Trust members with the full allocation of shares, based on length of service, will receive more than this. This emerged yesterday in a statement announcing that trade union official Con Scanlon had been appointed as a non-executive director with Merrion Investment Managers, an arm of Ballsbridge stockbroker Merrion Capital. Merrion and Mr Scanlon are well-known to each other. Mr Scanlon was one of the architects of the Eircom Esot in advance of its privatisation in 1999, while Merrion was a key adviser to the Esot for years. Under an agreement with the Revenue Commissioners, the Esot was due to be wound down in 2014 but those plans were accelerated after Eircom's examinership process last year. Most of the trust members are former employees. The examinership resulted in the company's gross debts being reduced to €2.35 billion, from €4 billion, and senior lenders taking 100% ownership of the company. Before the examinership, the Esot was the junior shareholder in Eircom with a 35% stake. The balance was owned by Singapore investment group STT.
EIRGRID PLANS €1 BILLION LINK TO FRANCE - Eirgrid is planning a €1 billion interconnector to France to be completed by 2025 as part of a plan to integrate Ireland into the wider European electric grid, reports the Irish Examiner. The operators of the Irish electricity network said they were in advanced talks with the operators of the French national grid, Réseau de Transport d’Électricité, and would complete the final part of pre-tender planning by early next year. A multi-million euro seabed survey between Ireland and France will be the final part of the jigsaw before Eirgrid starts tendering, chief executive Fintan Slye said at the launch of Eirgrid’s annual report in Cork. “The seabed survey would be the final piece in the jigsaw of the cost benefit analysis,” he said. Mr Slye said there was a strong business case for building a transmission cable that would allow Irish consumers access cheap French nuclear power, and Ireland would benefit by creating a market for our excess wind power. Mr Slye revealed that the East West Interconnector has recently begun operating at its full 500mw capacity. It was one of the biggest energy projects undertaken in the state with an off the shelf price of €600m. Eirgrid received substantial support from Europe.