Retired staff at Eir (formerly Eircom) are taking a major step towards securing a stronger and more direct voice in the governance of their occupational pensions, with pensioners preparing to contest elections for member-trustee positions in the company’s two superannuation schemes.
They say they intend to be in the room when the future of their pensions is being discussed and decided.
The Association of Eircom Pensioners (AOEP) is to put forward candidates in elections taking place over the coming months. The move follows a plebiscite in which 70 per cent of pensioner members of the schemes supported elections for all member-trustee positions, rather than having those positions nominated by trade unions which they say generally omit pensioner representatives. The result represents an important development for pensioners seeking direct representation in decisions affecting their retirement income.
At present, four member trustees are nominated by a group of unions, including the Communication Workers Union and Fórsa. The AOEP could have opted for a guarantee of one pensioner position, but instead they sought a democratic vote on whether scheme members should elect all of the member trustees.
The result was that 6,374 pensioners participated in the plebiscite from approximately 14,000 members of the schemes, of whom around 12,800 are pensioners. The AOEP says the plebiscite result provides a clear mandate for pensioners to seek representation directly through the democratic electoral process.
The campaign comes against the background of long-standing concerns among retired Eir staff about the treatment of occupational pensions following an agreement reached between management and the unions in 2010 when the pensioners say they had no say in the outcome and were just told what was planned.
Many scheme members originally began their careers with the Department of Posts and Telegraphs before transferring to Bord Telecom Éireann in 1984. They believe that, under the Post and Telecommunications (Services) Act 1983, transferring staff were given assurances covering security of tenure, conditions of service and pensions, including a commitment that they would not be worse off than had they retained their civil service status. Since 1972, civil service pension increases were linked to staff pay increases. When serving employees received increases, pensioners received corresponding percentage increases, commonly known as parity.
However, following financial difficulties in 2008 affecting both the company and the pension scheme, a pensions accord was negotiated with the unions in 2010. This initially froze pensions and subsequently placed a cap of 2.5% or CPI whichever is the lower on future increases.
The consequences have become increasingly significant for the pensioners. Since 2015, serving staff have received total pay increases of 24.6 per cent compared to 11.4 per cent for pensioners. During the period, the state pension increased by 29.96 per cent plus bonus payments at Christmas. The AOEP argues that the widening gap has contributed to a substantial reduction in the purchasing power and living standards of its members.
On top of that, when pension increases are agreed at company level, the Minister for Communications and the Minister for Finance must give authorisation before the increases can be paid. This cumbersome process can take up to nine months, whilst agreed wage increases can be paid immediately by the company without any Ministerial involvement.
Similar concerns have been expressed by pensioners of An Post about the different treatment in the payment of increases to employees and the pensions of retired staff there. This anomaly arises from instructions issued by the Dept of Public Expenditure and Reform that has control over the pension schemes of commercial semi-state companies. Yet, the Minister tells the Dail consistently that the operation of the schemes is a matter for the company, its trustees and staff representatives.
Pensioners of both companies staged a protest about this system outside Leinster House last February .
Many of the pensioners of Eir and An Post also face particular circumstances because they paid Class D PRSI contributions and therefore do not have an entitlement to the state pension like most pensioners in the private sector. For these members, their occupational pension represents their fixed retirement income.
Additionally, occupational pensions are subject to the USC unlike income from the state pension. This anomaly is tantamount to discrimination based on the source of pension income. So, Eir and An Post pensioners lose out on a number of measures.
For Eir pensioners, the forthcoming elections provide an opportunity to seek elected representation on the pension trustee boards. This is particularly important for this cohort who believe that the interests of retired scheme members require a stronger and more independent voice in pension scheme governance.
The forthcoming trustee elections therefore represent more than a change in how trustees are selected. For the AOEP, they are an opportunity for a fundamental change in the balance of representation within the scheme by putting pensioners’ interests directly into the democratic process governing their occupational pension schemes. With 70 per cent of plebiscite participants supporting the election process, the Association now has a clear platform from which to campaign for greater pensioner participation, accountability and representation. As the first step, it is a huge win for them.
For retired Eir staff campaigning for a stronger voice in the trusteeship governance of their occupational pensions, the forthcoming elections could mark an important new chapter: pensioners themselves seeking the opportunity to choose who represents their interests on the bodies responsible for their pension schemes.
Of course, pensioner trustees elected will have the same fiduciary duties and responsibilities as company appointed trustees in their stewardship of the scheme under the provisions of the Pensions Act 1990. They will have to act impartially and respect confidentially.
This development could have wider implications outside of Eir as pensioner associations across the commercial semi-state sector are discussing a greater collective consultative role for occupational pensioners in the governance of their pension schemes. The reality in these companies is that the line Minister in charge of each of them and the Minister for Public Expenditure and Reform control the design of the schemes, any changes being proposed, plus the cumbersome system for authorising increases agreed between management and trade unions. Yet, they regularly refuse to answer questions in Dáil Éireann.
Matt Moran is an author and writer living in Co. Cork. He has a particular interest in the lack of collective rights for occupational pensioners and the governance of their pension schemes.