Company winding up Pension Scheme

nudger

What will happen to ex members of a company who took early redundancy and are a few years away from pension age if the company decides to discontinue their Scheme as a cost cutting exercise.

Quite a few of the ex members as well as ones still working are long term staff members, 20, 30 + years are coming up to pension age.

The company says that falling interest rates, poor investment Performance, increased life expectancy and that the company has to inject capital over periods of time are the cause of this.

The company is government funded, so semi state, should the Croke Park agreement not cover this?

Don't want to name the company but think Library, Museum.

Thanks in advance.

PS. If this is against the charter, which is complicated, could you please put it somewhere else more fitting that might get an answer.

It's a bad time of year for this kind of news after the Budget.

coylemj

If the fund is wound up, the trustees are obliged in the first instance to purchase annuities to cover the cost of pensions for existing pensioners i.e. retired employees already in receipt of a pension from the scheme.

Whatever is left over is then distributed to current staff and deferred pensioners - the people who no longer work there but who have not yet reached retirement age. The distribution would typically be to a PRSA or into an existing DC scheme.

The price of an annuity is based on current yields from government gilts and because gilt yields are currently at a historical low, annuity costs are correspondingly high for a given income stream so for most pension schemes, a wind up in the current environment is the worst possible scenario for members of the scheme who are not currently receiving a pension.

nudger

coylemj wrote: »

If the fund is wound up, the trustees are obliged in the first instance to purchase annuities to cover the cost of pensions for existing pensioners i.e. retired employees already in receipt of a pension from the scheme.

Whatever is left over is then distributed to current staff and deferred pensioners - the people who no longer work there but who have not yet reached retirement age. The distribution would typically be to a PRSA or into an existing DC scheme.

The price of an annuity is based on current yields from government gilts and because gilt yields are currently at a historical low, annuity costs are correspondingly high for a given income stream so for most pension schemes, a wind up in the current environment is the worst possible scenario for members of the scheme who are not currently receiving a pension.

Thanks a lot for coming back so quickly.

From an employee's point of view what can they do to stop this.

Is a semi state not included in the Croke park deal, so therefor should be protected from changes in their current employment standings.

I.e set a pressident for other public sector workers.

ANXIOUS

nudger wrote: »

[/B]

Thanks a lot for coming back so quickly.

From an employee's point of view what can they do to stop this.

Is a semi state not included in the Croke park deal, so therefor should be protected from changes in their current employment standings.

I.e set a pressident for other public sector workers.

Once the trustees have decided to do it, their isn't much you can do. How old are you? What is the solvency rate of the scheme and the make up of active, deferred and pensioners. As above the people most protected are the people who have retired. I don't know enough about croke park to comment.

nudger

ANXIOUS wrote: »

Once the trustees have decided to do it, their isn't much you can do. How old are you? What is the solvency rate of the scheme and the make up of active, deferred and pensioners. As above the people most protected are the people who have retired. I don't know enough about croke park to comment.

The wording from the company is that they have issued notification to the Trustee of the scheme to inform them it will cease contributions by end of month.

The make up of the company would be that the newer staff over the last 5 years or so have no pensions payed by the company, while older staff that were made redundant over the last couple of years would be in their 50s - 60s most coming up to the pension age in the next year or two.

There would still be about 10% older staff still working entitled to a pension.

So from a hard nosed business point of view this would be great for them but a disaster for the deferred and still working staff.

The company receives a grant from the government each year and would be well aware of the pension payments, can't see the government having an issue with this as they all get great pensions and these ones are quite small.

More like the company senior management doing this to boost their CV's for the future.

BuffyBot

As this isn't a commerically available pension product, but one tied to employment I'll move this to the most appropriate forum

petersburg2002

Commercial semi-states are not subject to Croke park agreement, hence why ESB employees didn't have to pay pension levy, take pay cuts etc. The same with the striking Bord na Mona workers. Not sure where your company would fit though.

nudger

petersburg2002 wrote: »

Commercial semi-states are not subject to Croke park agreement, hence why ESB employees didn't have to pay pension levy, take pay cuts etc. The same with the striking Bord na Mona workers. Not sure where your company would fit though.

The company was always "linked to" the civil service and was benchmarked wages wise.

When croke park came in wage cuts were made in the company in line with it.

When thinking of the company think of the national museum or the national archives.

StillWaters

If they are not state employees, croke park does not apply. They don't sound like state employees to me.

Is there a union, what are they saying?