Queuing for a living: standing in line in hope of landing a job

THE ESB is considering closing its pension scheme to new employees after learning that the fund is nearly €2 billion in the red.

An actuarial report commissioned late last year by the company found that the scheme had a projected deficit of €1.957 billion on December 31st last year.

The fund’s total value was €2.4 billion, according to the report which was presented to the board yesterday.

The ESB is now considering starting a new scheme for new entrants to the company and is going to begin talks with its trade unions about the possibility of doing this.

The talks will also deal with what steps the company will have to take in relation to workers that are contributing to the scheme. More than 6,800 staff are contributing to the pension fund. It will continue to pay former staff who are receiving company pensions their full entitlement.

“ESBs pensioners will not see a reduction in their current pension payments as a result of the deficit,” a company statement said.

The ESB blamed the collapse in share values on international equity markets for the shortfall.

“The scale of the deficit presented does not come as a surprise given the current world recession and the 38 per cent fall in equity markets in 2008, but it does require remedial action to address the deficit,” it noted.

“In advance of this emerging deficit, management and the group of unions were already reviewing pension issues within the company and are fully committed to working together to develop a resolution to this issue.

“As is required under the regulations governing the scheme, ESB will also be consulting the trustees and superannuation committee.”

Group of unions secretary Davey Naughton said workers’ representatives would enter talks on finding a solution to the pension deficit. “As has happened on all previous occasions where a similar issue arose, the group of unions in consultation with ESB and the fund trustees will engage as to the potential consequences of the deficit, with the purpose of finding the most appropriate manner to address same in the interests of all members.”

Staff and company contributions fund the scheme, which is managed separately and independently from the business itself.

The ESB is not the first State company to tell staff that its pension fund is in deficit.

Bord na Móna recently told managerial and clerical workers who have been contributing to its defined benefit scheme that the fund is not now in a position to pay them, although it will continue to provide pensions to retired staff.

The State-owned energy and waste management company has plans to begin negotiations with its unions in an effort to find a solution to the problem.