B of I told to row back on pensions

The Labour Court has called for fresh talks between Bank of Ireland and its unions on the ongoing row about closing its pension scheme and has recommended that the scheme remain open to new members and recent recruits until the talks are completed in around three months.

The court found that Bank of Ireland did not honour its agreement with the Irish Bank Officials' Association (Iboa) when it closed its pension scheme to new members last year.

In a recommendation published yesterday, the Labour Court called on the bank and the union to enter into talks in order to resolve a clash on the future structure of pension schemes at the bank. The talks should not last more than three months.

Until this talks process is completed, the Labour Court said any individual staff members recruited since October 1st should be given a once-off opportunity to join the established defined benefit pension scheme.

However, Bank of Ireland said it would consider allowing staff members access to the existing defined benefit pension scheme only on completion of the further recommended talks.

The bank's proposed hybrid pension scheme for new employees does not provide the same guarantees as the established defined benefit scheme and the unions are strongly resisting its introduction.

The bank argues that if it does not close its pension scheme to new members, the current benefits promised to all staff would become unsustainable. It claims that the hybrid scheme gives employees the potential to attain the same benefits on retirement as under the established scheme.

In a statement, it said it was "satisfied to take part in the talks process proposed by the Labour Court within the specified timescale". At the end of the three months, any outstanding issues will be referred back to the court.

Iboa has written to the bank to say it is prepared to enter into fresh talks. The union said it welcomed the Labour Court's view that existing agreements must be honoured by the bank before any changes take place.

The Labour Court found that by closing the scheme to new members last October, Bank of Ireland had not honoured the terms of a restructuring programme agreed with Iboa in 2005.

"The voluntarily agreed processes could and should have been fully used to address the bank's desire for change in the established arrangements before unilateral action was taken," the Labour Court said.