Information on pension increase.

by

RTÉ Superannuation Trustees have suggested a 2.25% increase for Defined benefit pensioners.

This recommendation has to get approval from the Department of Communication, Climate Action and Environment and finally the Department of Public Expenditure and Reform. 

We have lobbied all the way and the following is enclosed for your information.

Ref: CCE-MO00476-2018 

Dear Mr. O’Connor
I refer to your correspondence dated 17th December, 2018 regarding the payment of a pension increase to the RTÉ Defined Benefit Pensioners.
Regulation 85 of the RTÉ Superannuation Scheme (RTÉSA) states that any increase in pension amounts must be authorised by the Minister for Finance. In this regard the request has been forwarded to the Department of Public Expenditure in the first instance. The Department continue to work closely with the Department of Public Expenditure with a view to reaching a decision regarding this request as speedily as possible.
Yours sincerely 

Michaela O’Sullivan
Private Secretary
Department of Communications, Climate Action and the Environment of Communications, Climate Action and the Environment

 

REPLY:

Ref: CCE-MO00476-2018

Michaela Sullivan
Private Secretary to Minister Bruton

cc Director General RTE,     Chair, RTE Superannuation

Dear Michaela,
Thank you for your email re the RTE pension increase application. 

May I ask you to forward this communication to the attention of the relevant person in the Department of Public Expenditure. 

The RTE Scheme Actuary has provided for an annual 2.25% increase in RTE pensions from the current year. RTE has sought permission to allow “a modest” increase. In the meantime, the government have provided for a 3% increase in public service pensions as of the 1st of January 2019. It has always been the practice to date that RTE pensions are indexed to national wage agreements. There has never previously been a breach of this practice. 

Additionally, three important factors need to be borne in mind;

  1. The RTE Superannuation Scheme has never failed the Pension Authority “Minimum Funding Standard”
  2. RTE employees were not allowed to pay the full PRSI stamp and therefore do not qualify for the contributory old-age pension or any associated medical, dental or optical benefits. The RTE pension is their only income source.
  3. Almost one fifth of RTE pensioners are on a similar income to those on the old age pension (circa €12,000). One third of all pensions are less than €20,000 and almost nine tenths are less than the average industrial wage.

Since 2005 the contributory old-age pension has increased from €179 to €248 an increase of 38.5%. 

In the last 15 years the RTE pension has only increased by 10.6% (taking in to account the 2.5% pension levy) lagging the old age pension by as much as 20%.  RTE have informed us that they have requested a “modest” increase which implies that RTE have not even applied to government for the full 2.25% suggested by the Superannuation Trustees. 

Inflation (Consumer Price Index) since 2005 is up 14 %. RTE pensioners therefore have endured a loss in the value of their pension of 3.4% between 2005 and 2018. There has been no increase in pension since 2007. Clearly the appropriate increase for RTE pensioners should be at least 2.25%. 

A 3% increase in public sector  pensions is proposed for this year. 

This illustrates that an alarming differential has developed between RTE Defined Benefit pensioners and comparable members of society in general. 

We have fallen far behind the legitimate expectations we had as lifelong employees of the state – which in reality we were. 

Members of the scheme have this legitimate expectation that RTE will standby their obligations given that their contracts of employment prevented them from paying a full PRSI stamp which would have entitling them to the contributory old-age pension. The RTE pension is the only pension available to former employees.

There has been no occasion since the scheme was set up under statute in 1960 when pension increases in RTE have deviated from awards to public service pensioners.

We urge you as the responsible Minister not to deviate from previous practice.

Any such potential deviation from the proposed increase recommended by the scheme actuary –  will be resisted by the 1500+ former employees who mostly gave 40 years loyal service to the organisation and the public.

Yours Sincerely

Tony O’Connor

Chair

RTÉ RSA

Comments are closed.