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The General Purposes Committee (GPC) met with the Pensions Manager and Chairman of Trustees on Thursday 27th September 2012 and were briefed on the Trustees decision to reduce pensions in order to recover the cost of the Pensions Levy.

The bullet points below highlight the important issues from that briefing. The GPC have written to the The Trustees and the ESB Chairman communicating the Retired Staff Association’s refusal to accept their decision to place the responsibility for the entire levy on the shoulders of pensioners while ESB have said they will the pay nothing towards the Levy and the serving staff will pay a much smaller proportion of the Levy in the future and perhaps only when they reach retirement.

The decision of the Trustees is a watershed for ESB pensioners. Never in the history of our pension fund have the Trustees reduced our pension. The fact that they choose to do it so unfairly leaves one wondering what the company has come to. The levy was imposed as a tax on Pension Funds  by the Minister for Finance. Fund Trustee were urged to find ways and means to pay this tax. Various options were suggested other than reduction in pension payments.

• Pensions will be reduced permanently by 0.6% from November 2012, for all members (and their spouses) where applicable, until both are deceased

• This 0.6% reduction in pensions is to recover the cost of the Pensions Levy of €18 million paid in September 2011 only

• On a pension of €24,000 pa (€2,000 per month) the pension reduction will be €12 per month

• The Pensions Levy was introduced by Government for a period of 4 years from 2011 to 2014

• The Trustees will review the situation following each of the Levy payments over the next 3 years

• At the end of the 4-year period of the Levy payments, the cumulative reduction in pensions could amount to at least 2.4% or €48 per month on a pension of €2,000 per month

• Pensioners are being asked to contribute €14 million out of the €18 million paid by the Fund

• Serving staff are being asked to pay the balance of €4 million but this is being deferred until they become pensioners

• ESB have refused to make any contribution whatsoever to the cost of the Pension levy despite making a profit of €469 million in 2011

• The Trustees rejected the suggestion that the Pension Fund should absorb the cost of the Levy despite an improved deficit situation, reduced from €1,957 million in 2008 to €72 million in 2011