CIE has commenced implementation of pension reforms - including increasing the minimum retirement age from 60 to 63 - in a pension scheme for managers and administrative staff estimated to have a deficit of up to €550 million.
The move comes as the trustees of the so-called "1951" scheme have warned they will seek High Court directions as to whether CIE alone is liable to plug any deficits, rather than members having benefit cuts imposed.
However, a spokesperson for CIE said the company has not been notified of any formal legal proceedings.
The Pensions Authority had given the trustees and the company until 22nd June to submit a funding proposal to bring the scheme into compliance with Minimum Funding Standard rules, or face the prospect of the Authority exercising its powers to unilaterally cut benefits or even potentially wind up the scheme.
CIE recently told an Oireachtas committee that it had accumulated deficits in its two pensions schemes totalling €975 million - with an estimated deficit in the 1951 scheme of €550 million.
However, some staff members argue that the deficits cited are "notional" - and that in reality the 1951 scheme is almost fully funded.
Members of the "Regular Wages Scheme" covering 75% of employees including frontline workers in Dublin Bus, Irish Rail, Bus Eireann and the CIE Group had already accepted reforms recommended by the Labour Court to improve the funding position, including extending the retirement age from 60 to 63.
More recently, members of the 1951 scheme also backed similar Labour Court proposals.
In a letter to the secretary of the 1951 Pension Committee, CIE Head of HR Aidan Grogan said that following the acceptance of the Labour Court proposals by both the unions and the board, the company has notified the Minister for Transport and the Pensions Authority that it is commencing the statutory process to implement the changes to the scheme outlined in the Court's recommendation.
The company anticipates that this will bring it into compliance with minimum funding requirements, and remove the requirement for a funding proposal.
CIE said the move is in response to the 1951 Pension Scheme Committee failing to develop a funding proposal capable of addressing the Minimum Funding Standard required by the Pensions Authority.
The trustees' threatened High Court action would seek direction as to whether CIE should carry the entire burden of plugging any funding gap in the scheme, without the requirement for members to suffer benefit cuts - based on commitments during a previous pensions restructuring in 1994.
However, CIE has ruled out any additional funding beyond current commitments.
The Labour Court proposals commit CIE to contributing €320 million to the 1951 scheme over the next 10 years, and the company says it cannot afford to pay anything further "nor would it be appropriate to do so".
"The Covid-19 pandemic has had a huge impact on public transport. The Government has supported the industry at a cost of several hundred million euro. As Ireland's largest public transport operator, we have been the largest beneficiary of this support. CIÉ cannot in all conscience seek further funds from Government to support its generous unchanged pension schemes," it says.
It describes the 1951 pension scheme as "... the last remaining open and unchanged Defined Benefit Pension Scheme that provides a pension of 50% of final salary (based on 40 years' service) anywhere in the State."
It is understood that the Committee (or trustees) of the 1951 scheme do not have a role in the implementation process - though CIE says the changes to the Statutory Instruments governing the scheme will require a consultation process.
Under the terms of the Labour Court recommendation, the retirement age will increase from 60 to 63, but staff can still retire from 60 subject to payment of a lump sum of less than €3,000 without any actuarial discount. IThe scheme also remains open to new entrants.
CIE describes the changes as "extremely modest when compared to pension changes in other semi-states, the civil service or the private sector".
"CIÉ's current employer contribution rate to the Scheme is 27%, which is much higher than general norms and, even so, this funding level is not sufficient to fund the level of benefit on a sustainable basis. As a result, the pension provision for the younger members of the Scheme is most at risk," the company says.
