Pension Freeze Issues


Jan 23rd 2019

To RTERSA Committee

In regard to the question raised by Joe Harris at our last meeting and our proposal to ask Mathesons for a formal opinion, it is important to consider any supporting documentation. I have read a wide range of the papers going back to 2002. It is clear that this entire matter – index linking – has been visited and re-visited many times. The Director-General in her letter of December 2018 points out that the pension increases were in fact paid after 2005 with an aggregate increase of 13.1% being provided between 2005 and June 2008.

Looking further back, the following table sets out the total pension increases awarded between 2000 and 2008.

It is clear, that to date, the RTE Superannuation Scheme has consistently awarded increases in line with National Wage Agreements. In future, our main priority should be to ensure that this practice is sustained. In that regard, we have issued a well researched, evidence based, submission to RTE and the relevant Government Ministers seeking an immediate increase of 2.25%. Our priority should be to achieve pension increases in line with public sector pay over and above increases associated with “pay restoration”.

(Note that since 2008 there were pay reductions in Public Service pay and, more recently, these have been restored.)

In regard to the contentious Transformation Agreement I think that it is fair to say that this matter has been for many years an important factor in the minds of some retired staff. It is important to place it in context. I quote Director General Bob Collins’ letter to then Chairman RTE RSA Des Troy in September 2003.

“The transformation agreement was a qualitatively different agreement from any other that had been made in the organisation prior to that time. This was a tripartite agreement between RTE, the Trade Unions and RTE Managers Association which recognised as an integral element the net reduction of 330 people in the number of staff employed by RTE. This was the first general agreement in which all the the parties accepted that staff reduction was a precondition to any movement on pay and that savings achieved were an important measure of any settlement. In its nature this required a substantial alteration in work practices and working conditions of those who remained in the organisation and part of the purpose of the agreement reached under Transformation was to recognise the additional work load taken on by many staff.

It would have neither been possible nor appropriate automatically to extend to retired members of staff the benefits which were being offered to serving members of staff in respect of altered work practices and increased workload.

However the organisation recognised that some element of the monies paid under transformation represented a Round – a general increase in remuneration not specifically linked to productivity or to change. That element representing 5% was passed on (January 2002) to all those in receipt of pensions from the superannuation fund. That decision clearly indicated that the concerns of pensioners were actively taken into account by the organisation.”

There are differences in opinion about the merit of pensioners seeking the same increase as serving staff for a major productivity deal but it worth bearing in mind that the remaining RTE employees got 8% increase on this occasion, while as Bob Collins pointed out pensioners did get a “special” 5% increase. RTE claim that pension increases were paid until 2008. The table above illustrates this. Following the “crash” in 2008, staff suffered considerable salary cuts, but RTE decided to leave pensions untouched.

Over the years, cases have been referred to the Pension Board and to Counsel. This latter in particular, involved substantial research with a very substantial amount of supporting documentation. Clearly a lot of work went into it. However the conclusion of the sub-committee was;

“Having considered all of the options open to the subcommittee and examined all relevant documents, the decision was made by the subcommittee in consultation with Smith O’Brien Hegarty solicitors and Counsel to defer for the time, pursuing any increase in the pension entitlement claim.”

While the Counsel option was not enclosed, one must conclude that the sub-committee – and by definition the main RTERSA Committee – did not feel the case was sufficient to warrant a very expensive legal case. This sub-committee was chaired by Joe Harris. I do not have a date for this. (Thought to be 2007). It is important to record that anyone who retired in 2000 was in receipt of a range of pension increases until 2008 as laid out in the table above.

We recently (2018 Nov.) sought the best legal advice available. Matheson’s answer to our Question 6 is quoted here:

Question 6: Would RTÉ have required Ministerial approval to break pension parity arrangements which are a feature of public sector pension schemes and which saw pensions go up in line with salary increases? What, if any, are the legal strictures involved in changing policy in this area?

9.1  Regulation 85 addresses the issue of pension increases under the Rules of the Scheme. It provides that pensions granted under Regulations 48 and 49 may be increased by such amounts as may be authorised from time to time by the Minister for Finance.

9.2  It is clear from Regulation 85 that an increase must be authorised by the Minister for Finance. RTÉ has no role to play in the award of pension increases under the Rules of the Scheme as this is solely within the power of the Minister for Finance.

9.3  I understand from your briefing document that reports from Mercer in both 2002 and 2005 reference the “practice” in respect of pension increases at the time with the practice in 2002 being to grant increases “in line with salary increments” and the practice in 2005 being “to grant increases in line with national wage agreements or other pension agreements as determined by the Authority”.

9.4  Therefore while a practice might have developed, it has changed over time in respect of the level of increases awarded. Also, the Rules of the Scheme are clear and provide that any such increases must be approved by the Minister for Finance.

9.5  In answering this question, I have only considered the Rules of the Scheme and the references in the Mercer reports of 2002 and 2005 which seem to point to a changing practice regarding the level of increase to be awarded. I have not considered and do not know whether there are other relevant factors (ancillary to the Scheme documentation) which also require consideration in this regard.

I quote also from a letter sent to the committee by Conor Hayes, Chairman of the Trustees some years ago.

“It is also important to note that the regulations of the scheme themselves do not currently provide for any automatic or guaranteed increases to pensions in payment and this is not a matter in respect of which the trustees themselves can make any variation or determination.”

This deserves careful reading as does this email just received from the Dept. of Communications etc;

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

This email emphasises the reality that RTE is entirely in the hands of the Civil Service in regard to pension matters – as in everything else. Matheson emphasised this to us.

Having spent some considerable time listening to all the arguments and reading all available material going back many years I have come to the firm conclusion that far too much time has been spent fighting lost battles. I am entirely satisfied that RTE and the Superannuation Fund have treated their pensioners honourably. Yes, there is an issue to be addressed for all Semi State DB schemes since 2008. Since then we have all fallen behind. It seems to me and to the Semi State Retired Staff Group which I also chair, that that battle lies as much with Government as with the various Superannuation Schemes.

The RTE of 2019 bears little resemblance to the organisation we once worked in. Arguably this matter of linkage with NWA agreements has poisoned the relationship between ourselves and the Superannuation Trustees. Yes, of course I would wish these matters had never have arisen. However, we should appreciate that the RTE Superannuation Scheme has, unlike others, kept its head above water. Along with most Semi State RSAs we are all in the same boat.

We have formidable challenges ahead. It is time to look forward, not backwards.

For this reason I consider it a waste of money to go back to the lawyers yet again.

Tony O’Connor

31st January 2019

Yours Sincerely

Tony O’C


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