RTÉ's bid to axe retirement fund expenses could cost its pensioners €40 million, former staff have warned the national broadcaster.
The State company plans to appeal a Government refusal to allow it change the pension scheme’s rules so it is no longer obliged to pay €500,000 in yearly administrative costs.
RTÉ's Retired Staff Association has written to the broadcaster’s new chairwoman, Siún Ní Raghallaigh, warning that the rule change could cut the defined benefit pension fund’s assets by €40 million over time.
The association’s chairwoman, Stephanie Fitzpatrick, said the 1,200 pensioners it represented were “appalled that RTÉ would seek to deplete the surplus in the RTÉ scheme in these very uncertain times”.
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Ms Fitzpatrick said the Government had refused the broadcaster’s request, part of a €60 million cost-cutting plan, but that the association knew RTÉ intended appealing this decision.
“How can the board of RTÉ contemplate raiding the pension savings of employees who for the most part have given 40 years of loyal service to the organisation?” she said.
The broadcaster said the request was reasonable as the scheme could afford it and pensioners would not be affected.
Inflation has cut the value of members’ pensions by more than 15 per cent, Ms Fitzpatrick said, while most got less than the industrial wage and a third received less than €20,000 a year.
RTÉ originally sought the change in February 2020 as part of a plan to cut €60 million in costs over three years. It argued that in light of this goal, €500,000 was a material amount, while it was far less significant against the pension fund’s then surplus of €42.5 million. The rule change would leave the fund itself covering the administrative costs. It had a €147 million surplus at the end of 2021.
Ms Fitzpatrick noted that Newera, part of the State’s National Treasury Management Agency, predicted that those costs would rise significantly over time, ultimately cutting the fund’s assets by €40 million. She said all other State companies covered these expenses as part of their core operating costs.
However, RTÉ said the pension’s board of trustee supported the regulation change as the scheme could afford it. “RTÉ will receive no cash from the pension scheme, but will make some savings as the scheme will now pay its own expenses,” the broadcaster said. “The scheme is showing a significant surplus after allowing for these expenses, so pension payments will be unaffected.”
