The Secretary has requested that the newletter below be circulated widely:
Newsletter to bring members up-to-date on recent developments.
1 The Pension Fund, like almost all benefit schemes worldwide, is now in a major deficit, but there is no question of the Fund not being able to pay our pensions. We understand that the Chief Executive and senior managers have taken a pay cut and a pay pause for two years. He has also asked the Unions to open discussions with ESB on a different Pension Scheme for new staff. This will NOT lead to a cut in pensions, but it is possible that there will be no further increases for at least two years. This crisis is largely due to the fall in equity prices and interest rates worldwide, causing major concern to the Trustees. We have often been told by the experts that equity prices have always risen in the long term. We also note that the Pensions Board have relaxed their Funding Standard rules to allow funds more than 10 years to recover from any current deficits. There has also been, over the last few years, a loosening of the link to staff pay, mainly because of non-superannuatable bonuses and the fudging of staff grades. We have campaigned at Group level, and will continue to do so, for staff to cease this practice, as long-term it would lead to seriously reduced pensions for everyone. If you have any influence with a local Union please ask them to raise this issue with their Head Office and notify the Secretary (see below) if anything concrete arises.
2 Our representative on the MPF Trustees, Dan Hickey, assures us that the Risk Equalisation payment was not factored into the fund finances, and that last year there was a small profit in the Fund. It would have been a large bonus to the Fund, which has an aging profile. The new levy/tax credits to replace this money, proposed in the Health Insurance Miscellaneous Provisions Bill 2008, currently does not apply to non-VHI funds, such as ESB, Garda and Prison Officer funds, on the basis that “they don‘t compete on the open market“. They all are in discussion with the politicians about this and the matter is not yet finalised. We ask everybody to urgently lobby local TDs, especially Government TDs, on this issue. Even if these representations fail, the Medical Provident Fund may get more expensive for us, but there is no question of its demise. Also, as was seen in the medical card fiasco, political decisions can always be changed or reversed by democratic pressure.
3 Be assured that the new Income Levy of 1% will NOT apply to anyone with an over-70 medical card.
4 Also since 1st January 2009 a Medical Card is available for a spouse of anyone with an over-70 Card. They will have to submit to a means test, but as the gross income limit is around €72,000 for a couple this should not be a problem for pensioners.
5 On a positive note the 3.5% increase will be paid to all pensioners and staff.
6 Our recent EM campaign successfully recruited c.1000 new members for our Branches around the country. If you wish to join us contact the RSA as follows:
Secretary can be contacted at s.odonohoe@gmail.com or by post to 14 Brookwood Grove, Artane, Dublin 5.
Late this afternoon I got a call from Marie Collins to update us on major developments. The Chief Executive has taken a pay cut of 10% and senior managers 5%, plus a two-year pay pause. He asked the Unions to consider a pay pause for all staff. There is no question of a paycut for pensioners, but the pay pause will affect us.
The deficit in the Pension Fund is likely to be a lot more than the 1.3 billion previously mentioned and he also asked the Group to consider a new Pension Fund for new entrants.
I asked her to arrange a meeting forus with the ESB and she will do so ASAP.
Seamus
