Credit union staff debarred from pension scheme

STAFF AT a small number of credit unions have been told they can no longer contribute to the defined benefit pension scheme run by the Irish League of Credit Unions.

The staff affected are members of credit unions who are no longer members of the league. The credit unions left the league a number of years ago, but the staff have continued to contribute to the league's benefit scheme up to now. The league's acting chief executive, John O'Halloran, said it had not been able to initiate the change up to now because of the case taken against it by the Competition Authority.

The authority took a case against the league claiming it was abusing its dominant position by denying access to a savings protection scheme to non-league credit unions. The authority won in the High Court, but the ruling was overturned on appeal by the Supreme Court.

Mr O'Halloran said the ruling by the Supreme Court meant the league could now cease offering services to non-league members. "Under the league's rules, you can't be in the pension scheme if you're not in the league. It's really a matter for the credit unions concerned, and their employees."

One staff member of a non-league credit union said he had been a member of the league scheme for many years but now, because his credit union had decided to leave the league some years ago, he found himself faced with no longer being a contributor to the scheme. "It's a big blow to me. I won't be able to get into any other defined benefit scheme,"the employee said.

A number of credit unions joined the rival Credit Union Development Association a few years ago following the league's very expensive and unsuccessful attempt to create an IT platform for its members. Mr O'Halloran said that of the 21 credit unions that joined the association, only four left the league. The others held dual membership. However, many of these, when faced with the option of losing their league membership, have returned to the league and left the association, he said. There was no comment available from the association yesterday. Its website says it has 10 member credit unions.

The Irish League of Credit Unions is holding its 50th annual general meeting in Limerick this weekend. The focus will be on marketing, losses on investments, and training. Mr O'Halloran said the credit crunch affecting the banks has already resulted in an increased demand for loans from credit union members.

Mr O'Halloran said the Competition Authority had "trumpeted" its win in the High Court but had been "very silent" since the Supreme Court ruling, which was a "huge embarrassment" for it. He said the authority would have to pay the legal costs arising from the case. They hadn't been taxed yet but it would be "several million".