RTE RETIRED STAFF ASSOCIATION
Niamh Collins, Private Secretary to the Minister for Public Expenditure and Reform, Catherine Martin, Minister for Culture…..Pearse Doherty, Sinn Fein Finance Spokesperson. Taoiseach, Micheal Martin, Brid Smith, Alan Kelly, Richard Boyd Barrett, Josepha Madigan, Leo Varadkar, Catherine Murphy, Jennifer Whitmore and others
I visited an old friend recently. Sean I will call him. Quite elderly, frail but bright and shining as he was over 60 years ago when he was asked to leave his job in the old Post and Telegraphs to join a select group who would engineer and operate the fledgling Television Service. Central to this move was a solemn undertaking that his all-important pension entitlements would be honoured.
When the Minister for Posts and Telegraphs (Mr. Hilliard) introduced the Broadcasting Authority Bill, on Wednesday, 20 January 1960 he stated in reference to section 15 of the bill;
“Arrangements will be made to preserve the superannuation privileges of officers of the new Authority who have transferred from the existing sound broadcasting service.”
Preserving these privileges would suggest that the intention was the RTE scheme would have an indefinite guarantee of linking pension increases to those in the public service.
The creation of the RTÉ Superannuation Scheme (RTÉSA) brought with it an understanding, together with all new recruits to RTÉ, that they would pay a Class D PRSI stamp and would therefore not have access to the State Pension. In other words, they – we – would not be a burden on the public purse and we would, with our new employer, contribute to our own pension.
Custom and practice in the Public Service and RTÉ has been to award pension increases in line with national public service pay agreements.
“In practice, all general pay increases since 1986 have been passed on to pensioners on the same basis as to serving staff.” Department of Public Expenditure and Reform
For 33 years from 1975 until 2008, on over 60 occasions, RTÉ pensioners were awarded pension increases equivalent to those awarded to employees in other parts of the public service under the National Wage Agreements. (see appendix below). Indeed, throughout the 1980’s and 1990’s these increases were automatically awarded without any formal written permission from the Minister. As the scheme is funded by employer/employee contributions these increases were never a burden on the State. Additionally, when over 500 pensioners received formal offers of early retirement incentives, they were offered in writing the following contractual commitment:
“You will receive benefits as follows: early retirement pension of XXX p.a. gross for life and linked to general wage changes.”
The RTÉ Superannuation Scheme Explanatory Booklets (1979 and 1993) stated:
“In practice, the increases heretofore granted have been on a parity basis, i.e. in line with salary increases.”
There has been an historic commitment by RTÉ to align increases in pensions with increases in pay and pensions in the public sector. RTÉ pensioners have a legitimate expectation that the practice of linking RTÉ pension increases to increases in public sector pensions will continue.
In late 2020, under “Building Momentum – A new public service agreement, 2021-2022” a 2% increase in public service pensions was agreed and the first phase of 1% has already been paid. For almost 14 years now – since 2008 – RTE pensioners have not received an increase. The Contributory State Pension has increased by approximately 11% in the same period.
The solemn undertakings to Sean and all his colleagues have been broken.
From the beginning, it was well understood that reasonable increases in benefits, in accordance with national norms would be possible. This provision was specially provided for by a change in the scheme regulations introduced by Erskine Childers – then Minister for Post and Telegraphs – in January 1969.
For almost 3 years the Minister for Public Expenditure and Reform has refused to sanction minimal pension increases for reasons which simply do not stand up to scrutiny. The increases involved 1% and latterly 2%. In short, the Erskine Childers acceptance of the need for regular, reasonable pension increases has been thwarted.
To confuse matters, the Minister has now surrounded himself with a Praetorian Guard of nameless ones, NewERA, one of whose apparent functions is to insulate the Minister from taking decisions which have their origins in long forgotten promises – such as the undertaking to my friend Sean and all his successors – the pensioners of RTÉ and the intentions of Mr.Childers.
The Trustees have carried out their task with exceptional skill and the accrued assets are in a very healthy state. The Minister has been previously informed by the Trustees of the scheme that the scheme can well afford the 2% increase sought. They pointed out that of the current assets of circa €1,100m – €800m. adequately cover core pension payments with almost €265m. available to cover future cost of living increases. The 2% increase would cost €17m. or just 6% of the fund currently set aside for future increases. The Trustees additionally pointed out that 85% of pensioners are on less than the average industrial wage and over one third are on pensions of less than €20,000.
The Scheme Actuary has also recommended that a 2% increase in pensions be awarded with effect from the 1st of January 2021. He has specifically stated that the proposed increase can be financed exclusively from the resources of the scheme without recourse to the sponsor. “The associated increase in liability does not compromise either the long-term financial position or the statutory funding position of the scheme nor does it materially increase the risk that either will become compromised in the future.”
Given the clarity of this actuarial assessment, on what basis does the Minister – for he is the boss – defend the delay in allowing this critically important increase at a time of unparalleled inflation? One suspects that the faceless bureaucrats in NewEra are more concerned at stopping all pension increases across state bodies rather than evaluating the capacity of funds to afford cost of living increases to people like Sean who has no access to the State Pension and continues to suffer the consequences of broken promises.
On another matter, astonishingly, the Dept. of PER is considering an application from RTÉ to change Rule 20 of the scheme to enable the transfer of management costs of the scheme from RTÉ over to the pensioners fund. The proposed rule change to transfer funds from the scheme to the employer for the purpose of relieving the employer of expenses which they have incurred under the rules of the scheme since its inception in 1960 is contrary to trust law. The Trust Deed (1984) clearly states that “no amendment of this deed or of the rules should be made if it would result in the payment or transfer of any monies from the scheme to the principal employer or any associated employer.”
With the advent of EU IORP 11 regulations and the costs associated therewith, this is simply an attempt to plunder “our funds” to cover the scantiness of RTÉ’s own finances. Management costs have been covered by RTÉ since the scheme’s inception in 1960. We are talking about many millions over the life of the scheme.
“It is clear that implementation of the draft Code will lead to additional costs for schemes which will ultimately be borne by employers or members Schemes have already seen significant increases in compliance costs in recent years as a result of new requirements such as ECB reporting, and further increases in the regulatory fees have also been flagged. These additional costs undermine efforts to increase and improve pension provision.”
Response to the Pensions Authority’s Draft Code of Practice for Trustees of Occupational Pension Schemes from the Irish Association of Pension Funds
The accumulated Trust Assets are legally held to be the property of the Trustees for use by them for designated purposes only. The assets are accumulated from the investment by the trustees of contributions from both the employer and also from members themselves. The principal designated purpose is the payment of basic pensions to members of the RTÉSA with a secondary objective being the payment of pension increases to members of the RTÉSA.
Finally, I would remind all concerned that the much-discussed matter of abuse has many faces. In my view and that of my colleagues, the way this entire matter has been handled falls squarely into the category of elder abuse. Large numbers of elderly former servants of this state have been deprived at a crucial time in their lives of their own deferred wages by an approach which as it kindest could be described as languorous in the extreme. A decision-making process free from any constraints of time, consideration, empathy or care. Days, weeks, months and years go by while what seems like a patrician elite are simply oblivious to the needs of those so dependent on their deliberations. This matter would take days in a modern business. On average, one of our members dies every week. Do the maths since 2018. To have wilfully frozen our pensions for so long in one of the most expensive countries in the world is beyond shameful.
A final word from an unlikely but respected source, Mr John Major, former British Prime Minister speaking 10th February.
“Trust in politics is at a low ebb…too often Ministers have been evasive, and the truth has been optional. When Ministers reply to legitimate questions with pre-prepared soundbites, or half truths…then respect for government and politics dies a little more. Misleading replies to questions invite disillusion. Outright lies breed contempt.. if democracy is to be respected, power must also speak truth to the people….if truth in the word of our leaders in parliament is lost – then trust in government will be lost too…. Trust, integrity and values are the structure upon which our democracy is founded. ”
While the context was the UK, the same applies here. Promises made in Dail Eireann on Wednesday 20th January 1960 are as sacrosanct today as they were then. No matter what NewERA says.