ESB unions have unanimously passed a motion at a special delegate conference in Dublin today, ordering a ballot for industrial action including possible strike action over the €1.7 billion hole in the company's pension plan
The dispute centres on ESB’s “unilateral changing of the staff’s defined benefit pension scheme to a defined contribution scheme and the company’s assertions that, as a result, it has no liability for current or future pension deficits,” the unions said ina statement.
They and management at the State-owned energy group have been at loggerheads for two months over the deficit, which would leave current staff with just 4 per cent of their benefits should the scheme be wound up.
The deficit is based on the minimum funding standard laid down in recently passed pensions legislation, which calculates a scheme’s liabilities in the event of it being wound up.
The ESB points out that its actuaries have confirmed that the scheme can meet its liabilities as they fall due. At the same time, it says that the Pensions Board has approved a plan that will eliminate the €1.7 billion minimum funding standard deficit by 2018.
It also says that a plan to address a €2 billion shortfall that emerged in 2010 is on target.
The company argues that the minimum funding standard cannot apply to the ESB pension plan as the 1942 legislation which established it does not envisage the scheme being wound up.