ESB employees take case over pension deficit
Row over deficit blew up at the group’s annual general meeting earlier this year
The ESB offices on Fitzwilliam Street, Dublin. Photograph: Cyril Byrne.
ESB unions expect a result from a ballot of members on a proposal to take industrial action over the €1.5 billion deficit in the State-owned company’s pension scheme in the middle of next month.
Four of its workers have begun a legal challenge to the “wilful and deliberate” failure by the company to address the €1.5 billion shortfall in their pension scheme while it has at same time planned to pay a €78 million dividend to its State shareholder.
The row over the deficit blew up at the group’s annual general meeting earlier this year when it approved the €78 million dividend to the State. It has also agreed to make a €400 million special payment following the planned sale of some assets.
Its group of unions last month began balloting workers for industrial action. General secretary Brendan Ogle said yesterday those votes will be counted by November 18th.
They will have to give one week’s notice of any action they intend taking if the ballot is passed. The four workers’ High Court action is being taken independently of the unions.
The four are concerned at the ESB’s “wrongful insistence” the scheme is now a “defined-contribution” rather than a “defined benefit” one – which means what a person receives on retirement is no longer guaranteed, the Commercial Court heard.
Mr Justice Peter Kelly said he was sure they were “worried sick” as this deficit amounted to “probably one of the largest holes” he had seen in the many pensions before the court.
The judge granted an application by Brian O’Moore SC, for Brian Baitson, William Flavin, Owen Kilmurray, and Margaret O’Connor, who began working with the ESB on varying dates since 1978, to have the case fast-tracked in the Commercial Court.
In an affidavit on behalf of the four, Mr Baitson, a network technician, says they were obliged to become members of the defined-benefit scheme when they joined the company. They had been advised it faces a €1.5 billion deficit as measured against the Pension Board’s minimum funding standard.
Notwithstanding this deficit, the agm of the company board last June passed a resolution clearing the way for payment of a €78.4 million dividend to its shareholders, the Government, he said.