CIÉ staff have accepted Labour Court proposals to address a deficit in one of the company's pension schemes - which include increasing the retirement age from 60 to 63.

The ballot result relating to the so-called '1951' scheme for around 2,500 clerical and managerial staff was 54% in favour and 46% against.

The Group Chair of CIÉ Fiona Ross recently told an Oireachtas Committee that its total pension deficit across both company schemes came to €975 million at the end of last year, putting both staff pension provision and the Group's financial position at risk.

However, some staff argue that that figure is a notional or technical deficit, that the ‘1951’ scheme is 98% funded, and that the company should carry the burden of plugging any gap without resorting to cutting members' benefits.

CIÉ operates two pension schemes: the Regular Wages Scheme for frontline staff, and the ‘1951’ scheme for salaried employees.

The members of the Regular Wages Scheme have already accepted Labour Court proposals to tackle the deficit in their scheme - including increasing the retirement age from 60 to 63.

However, a previous Pensions Authority deadline to submit a funding proposal for the ‘1951’ scheme was missed.

The '1951' scheme trustees known as the Pensions Committee are now seeking High Court directions as to whether the company should carry the entire liability for the deficit based on arrangements dating from 1994 when a number of company schemes were amalgamated - rather than a scenario where member's benefits are reduced.

The Pensions Authority has already warned the ‘1951’ trustees covering around 2,500 clerical, administrative and managerial employees that they could face prosecution if they fail to submit a funding proposal to address the deficit by 22 June.

It has also told them that it is considering using its statutory powers to unilaterally cut members' benefits under the scheme - or to wind it up - on the basis that it is "non-compliant" if a proposal is not received within 8 weeks.

Union sources said that now that the Labour Court ruling had been accepted by members, it must now constitute the baseline for any reforms of the pension scheme.

However, they stressed that it remained a matter for the ‘1951’ Pensions Commitee to decide if the funding proposals would be informed by the Labour Court recommendation, or whether they would continue with their stated objective of going to the High Court to clarify who was liable for the deficit.

The Pensions Authority does not have the power to compel anyone to make contributions to a pension scheme.

However, where defined benefit schemes fail to meet the statutory funding standard, the Pensions Authority has the legal power to direct trustees of a defined benefit scheme to reduce benefits under a "Section 50" order, or to wind it up.

Under such an order, accrued benefits relating to members' past service can be reduced.

However, members must be notified in advance of any proposed reductions and have one month to make written observations.

The trustees must consider these observations before making an application to the Pensions Authority.

If the Authority proposes to issue a direction under Section 50 or Section 50B, all scheme members - including retirees, current and former employees - must be afforded an opportunity to make submissions to it.

"The Authority strongly encourages trustees of such schemes to accelerate their own efforts to find a solution to their funding deficit without Authority intervention," it warns.

In a statement, CIÉ said it welcomes the result of the trade union ballot on the Labour Court recommendation.

It said: "The company confirms its hope that the 1951 Pension Scheme Committee, who are responsible for submitting a compliant Funding Proposal to the Pensions Authority to address the Minimum Funding Standard deficit, do so as a matter of urgency, to avoid Pension Authority intervention."