TRUSTEES of the main Irish Press pension fund have criticised Irish Life, alleging that quotations for continuation of life cover for its 470 members are "exorbitant". But the life assurance group has rejected the criticism as "totally without foundation".
Under the terms for the cessation of the Irish Press pension scheme, members must be offered quotations for continuation of life cover without the requirement for medical examination.
As the fully funded £15 million scheme is being wound up, Irish Life has sent the members quotations for whole of life cover (until death) or cover for 20 years. The letters to members state that other life cover options can be discussed subject to a minimum monthly premium of £20.
The criticism by the trustees stems from their expectation that Irish Life would quote for a renewal of the life cover on exactly the same terms as were available under the scheme. But the whole of life quotation, because it involves certain payout by the company, is more expensive.
Trustee Mr Michael Conway said the quotations were for "a far more elaborate cover than we had".
The quotations range up to £8,000 per annum and were "totally inappropriate and unaffordable" for people who are now unemployed or earning very low incomes, he argued.
Irish Life countered: "There is no question of us offering them benefits they did not already have".
Life cover with the requirement for medical examination is very attractive to anyone who would be refused cover or quoted very high rates on the results of a medical examination, a company spokesman said.
Members who have no reason to fear a medical have the option to shop around for cover, he said. Irish Life was obliged under the terms of the plan to offer whole of life cover as opposed to shorter and less expensive "term cover or cover for a specific period of time such as 20 years, he said.
Life cover for the 470 members was due to expire on January 31st.
As most members only received their quotations in late January, Irish Life extended the cover until February 9th.
This week the company again extended cover - it now expires on February 16th. The extensions involve no cost to the members, Irish Life said.
Mr Conway argued that the trustees' solicitors have been in contact with Irish Life to press that members be given "a reasonable chance of continuing the life cover we had".
He continued: "We want a no frills policy to age 65 years. We have a right to a continuation of the same cover. We are being offered whole of life policies. This is not the same cover and members are very angry.
Mr Conway contended that Irish Life was slow to send members individual quotations to continue the life cover element of their pension schemes. Because of the delay in sending out the quotations, members have little time to assess their positions, he argued.
Rejecting this criticism, an Irish Life spokesman said his company had responded quickly to the request from the trustees to provide quotations for continuation of cover.
"On January 19th we contacted the trustees for instructions on how to proceed on the continuation policies. Instructions were received by fax on January 22nd. We were given a number of options on distributing the advice to members, including the option of handing out the information at meetings for members arranged by the trustees for February 10th.
"But we decided to process more speedily and by January 30th some 500 letters were dispatched. Conscious that cover would cease on January 31st, we extended it until February 9th and we have now extended it until February 16th".
The fully funded pension plan is being wound up to give the members individual lump sum pension plans. The death in service element of the plan promised members four times salary.
As the complex winding up arrangements proceed, the life cover element has been maintained on a month to month basis. The winding up is expected, to be completed by March.
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