Letter to Ms Siún Ní Raghallaigh, RTE Chair

16th October 2023

Dear Ms. Ní Raghallaigh
I am writing to you regarding the appointment of a replacement RTÉSA (RTÉ Superannuation Scheme) Trustee for the retiring CFO. As you are aware the pension surplus is the biggest asset on the RTÉ balance sheet. Additionally, RTÉ are always asked to express their approval or otherwise for pension increases proposed by the Trustees. RTÉ are guided in their responses by the CFO who in this capacity acts solely in the interests of RTÉ. The CFO is also the primary interface between RTÉ and Government regarding RTÉ’s ongoing financial issues.
We are aware that on two occasions in the past RTÉ did not support the Trustees proposals.

RTÉ pensioners have no entitlement to the state pension and have fallen far behind inflation and increases in state pensions. We have only had a 2% increase since 2008 while the fund sits on a surplus in excess of €400M.

We strongly urge the RTÉ Authority to appoint an executive as Trustee who does not have such an apparent conflict of interest.

If the 1600 former RTÉ employees are to have TRUST in the RTÉ appointed Trustees we strongly advise the Board to appoint executives as Trustees who have no role in negotiations with Government relating to RTÉ’s own finances.
A chief financial officer (CFO) plays a critical role in managing a company’s financial resources and providing financial guidance to the organization’s leadership. The CFO’s primary responsibility is to safeguard the assets of the employer, whereas a pension scheme Trustee must act in the best interests of the scheme beneficiaries – including the awarding of pension increases when appropriate. However, being a pension trustee may create a conflict of interest and compromise the CFO’s ability to fulfill their responsibilities to the company.
A CFO should not be a pension trustee because the two roles have different objectives. A CFO’s primary responsibility is to manage the company’s financial resources and ensure that they are used in the best interest of the company. On the other hand, a pension trustee’s primary responsibility is to manage the pension plan and ensure that it is in the best interest of the plan’s beneficiaries. These objectives may not always align, and a CFO who is also a pension trustee may be forced to choose between their responsibilities to the company and their responsibilities to the pension plan.

We are not alone in making these observations.
“The ultimate driver behind trustee decision-making is the best interests of beneficiaries.”
7.2.3 In this regard, the issue of employer as trustee of defined benefit schemes has become more significant in recent years. Recent research underlines this view and concluded that, in the UK, the presence of such proportions of “insiders” create problems whereby the employer-trustees favour the shareholders of the firm over the plan beneficiaries.
The UK Pensions Regulator’s 2009 Governance Survey found: “Amongst those schemes reporting a conflict of interest, the most common conflict occurred where an employer nominated trustee was also a finance or company director of the sponsoring employer (34%).” (Sample size: 606)

“CONFLICTS OF INTEREST – The Treasurer (Journal of CFO’s) July 2010
“In many companies the treasurer also serves as a trustee of the pension scheme. Finance directors also often took on this dual role, but Fleming says that for many FTSE 100 companies this is no longer the case due to the potential for conflicts of interest. “Indeed, it can also be difficult for a treasurer to fulfil both roles satisfactorily,” he adds

 OECD study Pension Fund Governance CHALLENGES AND POTENTIAL SOLUTION Cocco and Volpin (2005), 
“When the employer’s finances get tough, conflicts of interest may arise, and impartial trustees are needed on the board to make governance work.

 Conflicts Of Interest for Company Director/Pension Scheme Trustees
20 June 2013 by Deborah McHugh (Dublin), Mason Hayes & Curran
“For company directors who are also trustees or members of an occupational pension scheme, this can be a particularly tricky issue as inevitably multiple interests can influence their decision making.
Examples of where this might become an issue include:
The director-trustee who knows their company is in financial difficulties where their duty to sustain the business will directly conflict with their duty as a trustee to gather in or potentially demand employer pension contributions under the pension scheme rules.
The director-trustee who possesses sensitive business information that they know adversely affects the strength of the employer’s ability or willingness to continue paying contributions under the scheme rules at existing levels.
The director-trustee who knows the employer is proposing to sell a significant asset and distribute the proceeds as dividends or that a resolution is being passed to wind up the pension scheme in the circumstances where there is a large funding deficit in the pension scheme.”
In conclusion, while a CFO is a critical member of a company’s leadership team, they should not also serve as a pension trustee. The potential conflicts of interest make it inadvisable for a CFO to hold both positions. It is best for the company and the pension plan beneficiaries to have separate individuals to fulfil those roles.

Your Sincerely

Stephanie Fitzpatrick


CC –

Mr Kevin Bakhurst- RTÉ Director General