Pfizer unions playing high risk game on pensions
Defined benefit schemes have all but disappeared from the Irish landscape
Some 1,000 of Pfizer’s 3,800 staff in Ireland are members of the pension scheme in question. Photograph: Reuters
For five years, union leaders have doggedly refused to accede to company plans to move workers from non-contributory final salary schemes to a less certain defined contribution pension model, now found almost everywhere in the Irish private sector.
They have snubbed proposals put together by the Workplace Relations Commission and by the Labour Court that included provisions to allow all workers over the age of 50 stay on their current scheme and would have paid substantial cash lump sums to those who moved to the new system with the full value of their existing benefits preserved.
Some 1,000 of Pfizer’s 3,800 staff in Ireland are members of the pension scheme in question, including the roughly 250 members of the two trade unions concerned, Siptu and Connect. The other 2,700 Irish staff are already on other pension arrangements.
Defined benefit, or final salary, pensions have almost disappeared from the Irish private sector. Pensions to which workers are required to make no contribution at all are part of industrial history – no longer present even in the Irish banks.
Ringaskiddy has come a long way from 1969 when Pfizer first dipped a toe in the Irish market, opening a plant to produce citric acid. It is no longer the source of the company’s active ingredient for Viagra – that has gone with other legacy drugs to the soon-to-be-hived-off Upjohn business; instead, following a $30 million (€27.1 million) investment in 2014, it is responsible for producing ingredients for US drug giant’s new generation cancer therapies
The unions welcomed Tuesday’s decision by the pharma company to give up the fight to persuade them to move to the new arrangement. But one telling phrase in that Pfizer statement should give pause for thought. It noted that it was giving up its efforts “at this time”, and warned of the need to control costs and the threat to competitiveness of the Irish business.
This battle of wills is unlikely to be over.