ESB management and unions will meet tomorrow in a further bid to head off a strike at the State-owned energy supplier which is caught in a dispute with workers over a €1.7 billion hole in its pension fund.
Its unions last week voted in favour of striking as management and workers remained at odds over the scheme’s solvency, with staff claiming that the pension pot is €1.7 billion short while the company says that this is not the case.
Its group of unions, made up of five individual organisations, is due to serve strike notice on the company on Friday, and industrial action could begin on December 16th, but both sides are scheduled to meet tomorrow in an effort to find a resolution.
Those talks will come in the wake of a meeting yesterday at which the Government confirmed that the liability for any shortfall in the scheme rests on the ESB’s shoulders.
The unions’ claim is based on the minimum funding standard that pensions law applies to all defined benefit schemes. This calculates a fund’s liabilities as if it were being wound up.
Meeting
The ESB says this does not apply to its scheme, as it was established by legislation and can be wound up only by ministerial order. Following a meeting involving four Government departments, the ESB and the group of unions, the Department of Social Protection confirmed the pension fund "is subject to the minimum funding standard".
Its spokeswoman also confirmed the ESB has put in place a funding proposal designed to address the €1.7 billion deficit by 2018. The company said earlier this year that the Pensions Board approved this plan in 2012.
However, the ESB also said that despite this it intended to ask the Government to exempt its pension plan from the minimum funding standard.
General secretary of the group of unions Brendan Ogle said yesterday the Government position confirmed responsibility for addressing the deficit lay with the ESB.
“It also confirms that the Government and taxpayer have no role to play in relation to the deficit,” he added.
EU law, which underpins the Republic’s pensions legislation, requires that defined benefit retirement schemes can be exempt from the minimum funding standard only where the State guarantees the liabilities.
As there is no such guarantee in relation to the ESB scheme it is not exempt, according to Mr Ogle.
However, the ESB’s account of yesterday’s meeting is at odds with this. The company said that it was part of an ongoing process designed to establish whether the funding standard applied to the group’s retirement scheme.
A spokeswoman said further talks involving the company, unions and various departments are due to be held on this in the new year.
The row over the pension scheme dates back to 2011 when the unions and company implemented a plan designed to plug a €2 billion gap in the fund identified by actuaries.
