Just to keep you all up to date. We requested an oral answer from the Minister for PER and this was it. I replied to Minister for Culture etc.
Please see below:
For Oral Answer on : 01/03/2022
Question Number(s): 64,70 Question Reference(s): 11382/22, 11381/22
Department: Public Expenditure and Reform
Asked by: Bríd Smith T.D.
* To ask the Minister for Public Expenditure and Reform further to a previous Parliamentary Question on the pension scheme of retired RTÉ employees that a decision on such schemes was not solely his responsibility, if Regulation 85 which specifies that a pension may be increased by such an amount as may be authorised from time to time by the Minister for Finance and if since the Department was split into two, if he has assumed the role and approved all subsequent changes to the RTÉ pension scheme; if this suggests that his Department does have sole responsibility; and if he will make a statement on the matter.
– Bríd Smith T.D.
For ORAL answer on Tuesday, 1 March, 2022.
* To ask the Minister for Public Expenditure and Reform if he will clarify if the pensions schemes of former RTÉ employees and Dublin Port and Dock workers are subject to a veto in terms of a proposed rise in these pensions by his Department; and if he will make a statement on the matter.
– Bríd Smith T.D.
For ORAL answer on Tuesday, 1 March, 2022.
As the Deputy might appreciate, issues involving the pension schemes in relation to the Commercial Semi State companies can be complex. They also involve a range of different stakeholders and are influenced by a number of different factors such as those which impact on the overall value of pension funds. There is also a historical context to the position of these schemes many of which have faced financial challenges over many years.
I would like to take the opportunity to briefly outline the background to some of these issues before highlighting the key factors to be considered in the development of proposals for discretionary pension increases as well as the process by which these proposals are brought forward.
As you now, many of the pension schemes for the Commercial Semi State Bodies experienced a deterioration of their overall financial position during the financial crisis. Difficult measures had to be taken in some cases to ensure their survival. A large number of the schemes are still in deficit.
This means that along with relevant policy considerations, the extent of precedents and consistency with scheme rules, the overall funding position of the relevant pension scheme is one of the most important factors in considering any pension scheme proposals. Any measure which has the potential to negatively impact on the financial health of a pension scheme must be carefully evaluated.
This also applies to proposals for discretionary pension increases. Many of the pension schemes in the Commercial Semi State sector have not had pension increases for this reason. As a result, the understandable desire of retired scheme members for pension increases must be balanced with with the overall protection of pension benefits for all members of a pension scheme and with the long term survival of schemes.
Ultimately, if pension increases are not affordable, it can lead to a failure to meet the statutory funding standard, which in turn can trigger the need for more difficult measures to restore the financial position of a pension scheme.
As the key stakeholders involved in considering these proposals, the parent Department along with the relevant scheme trustees and the scheme employer all play an important role in ensuring that the full impact of pension increases on the sustainability of the pension funds is carefully assessed along with all the other policy considerations before proposals are finalised
The normal process by which these requests are advanced involves the parent Government Department under whose aegis responsibility for individual Commercial Semi State Bodies falls considering and approving any changes to pension scheme rules or discretionary benefits.
My Department then considers these proposals when a fully completed set of business case and technical assessment documents are submitted in line with the standard governance requirements. This includes the advice from NewEra. This process applies to all proposals including the RTÉ pension scheme before they are brought forward for my consent.
In relation to your other parliamentary question, the full set of documents have not yet been received by this Department in relation to both the RTÉ scheme and the Dublin Port scheme proposals. As you can appreciate, it can take some effort to assemble and review the full range of technical material required.
Officials in my Department are available to consider these matters once all the necessary financial and actuarial analysis is carried out and the governance requirements have been met.
Overall, while I understand the sensitivity of pension increase matters, the issues involved are not necessarily straightforward and the full impact of proposals have to be considered, not least on the long term viability of schemes.
Beartas ríomhphoist an Oireachtais agus séanadh. oireachtas.ie/ga/email-policy/
Oireachtas email policy and disclaimer.
Followed by my reply today.
March 7th 2022
Dear Minister Martin,
I would like to bring to your attention the answer to a Parliamentary question given this week by the Minister for Public Expenditure and Reform. For ORAL answer on Tuesday, 1 March, 2022. (see above.)
He stated that any decision on the proposed 2% increase in RTE pensions depended on the following considerations;
Any measure which has the potential to negatively impact on the financial health of a pension scheme must be carefully evaluated.
The full set of documents have not yet been received by this Department in relation to the RTÉ scheme. Officials in my Department are available to consider these matters once all the necessary financial and actuarial analysis is carried out and the governance requirements have been met…. They also involve a range of different stakeholders.
Your department and NewEra have had all the necessary documentation and actuarial/financial information on the proposed increase for 15 months. There appears to have been a serious breakdown in communication if the Minister for Public Expenditure and Reform can stand up in the Dail and claim that “the full set of documents have not yet been received…” within such an extraordinary period of time. The Actuarial and Financial data provided to you by RTE and the Trustees clearly evidence that the proposed 2% increase would use only 6% of the surplus set aside for future discretionary cost of living increases. Pensioners have not had an increase for over 13 years while inflation has been over 10% in the intervening period. All stakeholders have supported the provision of the increase sought. I quote the Minister again:
There is also a historical context to the position of these schemes many of which have faced financial challenges over many years.
Many of the pension schemes for the Commercial Semi State Bodies experienced a deterioration of their overall financial position during the financial crisis.
The RTE Superannuation scheme has never failed the statutory Minimum Funding Standard and Risk Reserve. Historically The RTE defined benefit scheme is the best performing defined benefit scheme in the country – with the highest investment returns over the last 15 years. Specifically, your Department was provided with detailed Actuarial/Financial in December 2020 by the scheme trustees – including the following statement;
“Over the 17 years between 2004 and 2019 the RTÉSA has successfully delivered a weighted average annual investment return after fees and costs of circa 6.2% net with medium to low volatility and risk – an Irish Defined Benefit pensions industry leading result which includes both Private and Public Sector sponsored Funded DB schemes.
Importantly also during that time, and despite the extreme economic events that have occurred (e.g. 2008 Economic and Banking collapse), the RTÉSA has never been required to put in place any form of special solvency arrangement with any of the pensions Authority, the sponsoring employer (RTE) or with the members themselves.”
I suspect, Minister, that you personally do not have an issue with the inherent justice in our case. The facts are transparently and manifestly clear. The financial case is beyond doubt but I must repeat the overarching rationale; our members have not had any increase in pension for many, many years. We are now facing unprecedented inflation in excess of 10%. These are people coming towards the end of their lives. The RTE Superannuation Fund represents their deferred wages and is not a burden on the public purse.
What we are dealing with here is a classic case of bureaucracy in action, oblivious to the humanity of the case. John McGuinness expressed this well in a recent article in the Examiner.
“The Dáil has become a creature of the civil service ……. and are taking power further and further away from the people.
An administrative structure has been quietly created: a nightmare of quangos, subsidiary public service organisations, satellite companies and organisations and committees of one sort or another. (Think NewERA). It’s just not good enough. The civil and public service needs a more proactive, efficient, accountable, and transparent mindset.
The country deserves better than a 100-year-old engine with poor acceleration, whose clutch is stuck.
Politics is essential in a democracy, and its strongest pillar. A country goes nowhere if its public and civil service simply mark time, and where it gets to when its national parliament has been sidelined should be a cause for concern.”
This is a quotation from a respected public servant, Chairman of the Oireachtas Finance Committee.
The Standards in Public Office Commission includes the following.
The requirements of the Code: In the performance of their duties civil servants must: (a) perform their duties with efficiency, diligence and courtesy. (b) Observe appropriate behaviour at work… & by dealing with the public sympathetically, fairly and promptly…….
The elderly, retired staff of the State Broadcasting service should not have been reduced to this, begging year after year for nothing other than that promised by Government, many years ago. From meeting you here in Wesley Heights, I know that this is not what you went into politics for – and it is not why I voted for you.