ESB may pay bulk of its pension shortfall

The ESB is facing the prospect of having to pay two-thirds of the company's €500 million pension shortfall with staff expected to pay the rest.

Unions and management at the company are currently studying the terms of a recommendation on the issue from the company's powerful Joint Industrial Council.

While not specific about who should make up the shortfall, the recommendation points to the previous pension shortfall of 1992/93. This was subsequently addressed when the company increased its contribution by two-thirds and staff by one-third.

The new recommendation says the solution arrived at then should be revisited. Recommendations from the council are generally accepted by unions and management.

While the ESB would not welcome having to pay such a large sum, albeit over several years, there appeared to be some relief last night it had not been ordered to pay the whole amount. The Department of Communications is also believed to be satisfied with the recommendation.

This is because some union members wanted the company to foot the entire bill. The deputy chairman of the company, Joe LaCumbre, previously called for the company to withhold its annual dividend to the Government as a way of addressing the shortfall.

The latest recommendation is based on submissions from various unions and management. It says both sides agree there is an "absolute imperative" to address what it describes as the actuarial deficit in the superannuation fund.

It calls for fresh negotiations between unions and management "as soon as possible" and says they should be concluded within a six to eight week period. It says it would be beneficial if the unions adopted a united approach to the issue.

The pension deficit has complicated discussions on a range of other industrial relations matters. Several unions originally demanded a generalised pay increase but because this would have worsened the pension deficit a fresh demand for non-pensionable pay increases was submitted instead.