Retired CIÉ staff in line for first pension increase in 17 years

Nearly 6,400 retired staff who worked at the State-owned CIÉ transport group are to receive their first pension increase in 17 years under an initiative to be announced on Thursday.

Pension increases of up to 5 per cent will be set out as part of a deal drawn up following talks by the CIÉ group and trade unions, and backed by the Government.

It is understood the CIÉ group, which comprises Irish Rail, Dublin Bus and Bus Éireann, will provide about €30 million to fund the cost of the rise for retired personnel who last received a pension increase in 2008, with the Government providing “a letter of support” for the proposed pension deal.

Retired staff have been campaigning for years for a pension increase, citing the rising cost of living. Minister for Transport Darragh O’Brien told the Dáil in March that the pension schemes operated in the CIÉ group had a deficit of about €371 million and that the scheme actuary did not believe that a pension rise was affordable.

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The CIÉ board told the Minister in February that all the constituent companies believed that “pensioners deserve an increase and the pension scheme deficits need to be dealt with”.

Under the new proposals, the precise increase for pensioners would be calculated on a sliding basis depending on the date of retirement of the individual concerned.

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Former staff who retired on or before December 31st, 2020, would receive a 5 per cent pension increase, with those who retired in 2021 getting 4 per cent, while those who retired in 2022 are in line for a 3 per cent rise.

It is also proposed that a new “pension protocol” will be put in place – similar to the arrangement in other commercial State companies – to determine increases that may apply in future years.

Under the proposals, which follow lengthy talks between the CIÉ companies and trade unions, there would be some changes to existing pension schemes operated in the group, but no diminution of benefits for members.

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Members’ contributions would not change under the proposals.

The CIÉ group employs more than 12,500 people, including contractors, and there are more than 10,000 active members in the two defined benefit pension schemes in operation. These are known as the regular wages scheme and the 1951 scheme.

There are about 2,260 people receiving benefits under the 1951 scheme and 4,125 in the regular wages scheme.

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Under the proposals, staff taken on in future will be enrolled in a new defined contribution scheme. This is described as a “best in class” scheme. They would also be covered by a death-in-service benefit of three times their salary as well as a spouse’s and children’s pension.

Under other proposed reforms, current employees in the regular wages scheme would receive an enhanced retirement gratuity, up from 325 times to 351 times the weekly pension. This could see lump sums for drivers in the different companies increase by between €3,600 and €6,500.

Staff covered by the 1951 scheme could, under the new proposals, retire earlier than they may have planned with improved benefits. They could also opt to cease paying contributions to the defined benefit scheme once they reached maximum service and contribute instead to the new defined contribution scheme.

The Minister said in March that his officials were in contact with financial advisers at NewERA, the Pensions Authority and the Department of Public Expenditure to bring CIÉ pensions on to a more stable footing for the benefit of active and retired scheme members.