Staff at Permanent TSB may lose up to half the value of their promised pension entitlements because management has ceased contributions to three defined benefit pension schemes, according to the Unite trade union.
Speaking at the Unite trade union conference in Belfast, PTSB employee Niall Sweeney said that between 2001 and 2008, management had effectively bankrupted the company.
Mr Sweeney said the management decision to stop contributing to the pension funds had forced the scheme trustees to wind them up.
He said that 3,700 members of those schemes would be looking at cuts of up to 50% in their pension benefits.
He also said management had attempted to justify their decision on the basis of Government demands to reduce payroll costs by between 6 and 10%.
He noted that 40% of bank staff earn less than €30,000 a year - and accused the Government of exploiting public anger by insisting that bankers' pay be cut will paying off unsecured bond holders. It was also pointed out that the bank's chief executive would not be affected by the winding up of the pension schemes.
The conference also heard from Mr Sweeney that if PTSB succeeded in winding up the schemes, it would set a precedent across the private sector. He said the Government could not wash its hands of what was happening in the banks.
A spokesperson for Permanent TSB confirmed that from June 1, the bank had ceased contributing to the defined benefit schemes and opened defined contribution schemes.
The spokesman said the current deficit in the schemes was around €350m and could rise to €500m over a 10 year period if it were not addressed.
He said the financial impact of the changes on staff would have to be assessed, and no final figure had yet been confirmed.
The PTSB pension dispute has been to the Labour Relations Commission and has been the subject of a hearing at the Labour Court. The Labour Court recommendation is now awaited.
Sources also warned that if the company did not address the deficit, the shortfall could end up being picked up by the taxpayer.
Unite delegates at today's conference backed a motion calling for an immediate concerted campaign with other unions to fight what it called this latest attack on workers' pension.
The motion also called for immediate action in response to the Government's refusal to implement legislation to protect pensions.
