ESB staff try to halt €500m dividend payments to State over pension dispute
Workers claim plan has €1.6bn shortfall but company says it is fully funded
The ESB will ask its annual general meeting today to approve the payment of a €78.4 million annual dividend to the exchequer. Photograph: Cyril Byrne
A number of ESB workers are attempting to stop the State energy company paying €478 million in dividends to the Government in a row over a €1.6 billion shortfall in their pension scheme.
The ESB will ask its annual general meeting today to approve the payment of a €78.4 million annual dividend to the exchequer.
The Government has also asked for a €400 million special payment next year pending the proposed sale of a number of the group’s power generating plants.
However, four employees – Brian Baitson, William Flavin, Owen Kilmurray and Margaret O’Connor – are threatening legal action to halt the payment of any dividend, on the grounds that it would be unlawful, as it would undermine the ESB’s ability to deal with a €1.6 billion deficit in its staff pension scheme.
A letter to the ESB from their solicitors, Dublin firm Byrne Wallace, warns they will take legal action if the ESB attempts to pay any dividend to the Government.
A number of staff are also planning a protest outside the group’s head office in Dublin ahead of today’s general meeting.
The workers’ lawyers say that legal action will include seeking the restitution of any payment and, if necessary, an order demanding that the ESB take steps to deal with the pension shortfall.
The deficit is measured according to rules laid down in the Pension Board’s minimum funding standard, which calculates the scheme’s liabilities in the event of it being wound up.
The four claim that if this were to happen, staff who are paying into the plan would be left with just 3 per cent of its assets, effectively wiping out their investment.
However, the ESB says it has a plan to ensure the scheme meets this funding requirement by 2018. In addition, it has applied to the Department of Social Protection for an exemption from the minimum standard.
It also pointed out yesterday that the scheme meets another standard, set by its actuary, which is based on the fund continuing and assesses whether or not it can meet its liabilities as they fall due. The company believes this is the more realistic measure as neither it nor the Government plan to wind up the scheme.
The ESB group of unions, which represents the bulk of the State company’s staff, could not be contacted for comment yesterday.