ESB pension

W

WizardDr

Registered User
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My understanding is that the ESB Pension Scheme(s) were set up min 1946.

The legislation (I am told) is that any shortfall in funding was to be made up by the Company AND the employees by agreement.

This does not appear to me to be a DB Scheme on the basis that the employer is not on the hook for the deficit unless and until the Employer agrees. That payment could be 0% to 100% or anywhere in between.

Is it not the case that whatever this creature is - its not DB.

Who advised Mr Ogle?

Any views?
 
I am no supporter of Mr Ogle, but:
-if it looks like a DB scheme
-if it walks like a DB scheme
-if it quacks like a DB scheme
well it is a DB scheme.
For 60 + years all sides understood it to be a DB scheme and it was funded as such (apparently). So why did the ESB suddenly change it to DC in the Company Accounts some two years ago?
It may only be one letter of a difference but Pension Board rules require a DB scheme to be properly funded or at least have a plan to get there. Obviously if the scheme became underfunded then both sides will have to sit down and resolve the issue. But that means the Company also are on the hook, unless they decide to wind up the scheme (highly unlikely for a State Company).
 
Conan said:
I am no supporter of Mr Ogle, but:
-if it looks like a DB scheme
-if it walks like a DB scheme
-if it quacks like a DB scheme
well it is a DB scheme.
For 60 + years all sides understood it to be a DB scheme and it was funded as such (apparently).
Click to expand...

Very well put Conan!

Model Employee Superannuation Scheme for State Bodies is the document set out by the Civil Service for the commercial semi-state superannuation schemes. They are all funded schemes db in contrast to the public/civil service schemes which are unfunded.


 
Actually how could it be a DB scheme if there has to be 'agreement' between the parties to fund the deficit.

So Conan read the post again. I am not interested in what people actually thought it was as opposed to what it is.
 
WizardDr.

It is a Defined Benefit Scheme.
If it is not, a lot of State Type Pensions that have evolved over time would also not be Defined Benefit Schemes. If something is De Facto understood as DB over a very long period , I do not see any Judge deciding otherwise.

There has been a lot of (noise) over the ESB scheme , can I put this to people.

A Guard or Nurse or Teacher is told by Employer Mr Government that their DB 50% final income pension is now a Defined Contribution from 2018 , but do not worry it will be fully funded by Mr Government after 2018.
Would Mr Guard, Mr Nurse , Mr Teacher accept Mr Governments word ?
I think not.
 
From what I understand the ESB scheme is no different to the scheme in Aer Lingus and the DAA. The same language about employer AND employees having to engage to sort out deficits is included. Aer Lingus aren't for turning in their insistence that they have no further liabilities after what they are proposing to put in now which more than likely isn't enough to save the scheme. And indeed Ryanair have threatened to sue over this contribution. Just like Aer Lingus say they will sue SIPTU if they take industrial action on the matter

Aer Lingus and DAA workers signed up in the same good faith as the ESB workers so what's the difference? Who is going to save them?

Oh well, the ESB shouldn't worry. The taxpayer will continue to pick up the bill.....
 
Sunny;

If Aer Lingus and Daa workers signed up {in good faith} then they must be protected.
Think about it, You work for + years and part of your employment is your pension.
Then your employer changes the Rules ?
On Esb it ain,t the taxpayer , it is part of our electricty cost but is also part of what was freely agreed.


What I am saying is it is VERY DANGEROUS to allow any Employer leeway over Pensions.
History says employers will hang the employee if it suits them in the future.eg Aer Lingus /Daa ,

So is any pension safe?
 
TRS30;

Defined Contribution Pensions !
1. Government are raiding them.
2. You need to have a bigger fund than ever to get a reasonable return.
3. They are as safe as the Market {God help us!}

a. With luck the Market will improve.
b. With luck @ retirement fund will buy good pension.
c. With luck I will live to benefit.
....................
What I am clear on as a Defined Contribution fund holder is ,this,
ANYONE on a Defined Benefit Pension would be BONKERS not to defend it to the bitter end!
.
 
I live with luck while others live with certainty!

I am angry because our current government want to socialise every debt in this country even to the extent of robbing defined contribution pension funds to pay under funded defined benefit rather then make them take a reduction in benefit.
 
TRS 30;

Yup , it is a mess , those of us in defined contribution are being stolen from.
I still do NOT wish to see reduction in Defined Benefit unless and until Management prove that their reasoning has the ring of equity.
Our past {government} have already socialised the big Bank Debt and the new {government} grasp at sneaky things like pension funds.
Of ALL things, pension funds must retain certainty not have us wondering , which git will put their grubby little finger in ?
It is wrong.

(gripe over for now!)
 
I think it is a Defined Benefit scheme since the definition is based upon what the basis for pension payment is. See below from Irish Life website

Defined benefit schemes
In a defined benefit scheme, the pension you are entitled to at retirement is defined in some way by reference to your earnings and your length of service. So you know in advance what your pension will be. For example, half of your final salary if you have 40 years service or that it will be a certain amount each week.

Defined contribution scheme
In a defined contribution scheme, the pension you receive at retirement is dependant on the value of the fund you have accumulated to that point, subject to limits. The contribution is fixed by agreement with your employer. So depending on the scheme in place, you may agree to pay a certain percentage of your salary into your pension, and your employer may agree to contribute a certain amount, but the benefits are not fixed in advance.

In all fairness even though I am not a fan of Mr. Ogle or indeed his politics in this instance he and the staff are correct. Basically the company have been playing games with terms in the Accounts to try to make their Balance Sheet look more attractive. It is also worth noting that the deficit is really notional as it appeared as a result of the Government changing the rules.

There has been some mention here of the Government dipping their fingers into DC pension funds, If I'm not mistaken DB funds have also been hit. This is actually a very serious matter which I think should be resisted by thoseof us who choose to pay into pensions
 

Wait till they start dipping into the capital of our savings to pay for the next bailout.
 
Bonaparte said:
....... If I'm not mistaken DB funds have also been hit. This is actually a very serious matter which I think should be resisted by those of us who choose to pay into pensions
Click to expand...

If you are talking about the pension levy then it does not impact on DB schemes members as their benefits are protected.
 
Is the big game here to keep the pension liability on the ESB's books so that it less attractive for sale? The last thing that the Unions want is for the ESB to be privatised. I agree with them on that; the state has a very bad record when it comes to selling state companies.
 
TRS30 said:
If you are talking about the pension levy then it does not impact on DB schemes members as their benefits are protected.
Click to expand...

Yes it does. It is just up to the scheme as to how apply the levy
 
Sunny said:
Yes it does. It is just up to the scheme as to how apply the levy
Click to expand...

So the final amount that a member of DB scheme will be entitled to will be reduced by the amount of levy paid, factoring in compounding etc?
 
The pension levy is payable on defined benefit pension schemes. The scheme has to fund this. Whether the employer pays it or the employee pays through reduced benefits or increased contributions is up to the scheme and trustees. I have seen schemes where the employer just picks up the tab to save hassle but I have seen schemes where the employer is not in a position to contribute and benefits have been cut. If memory serves me right, RTE is one such scheme.
 

Thanks; good to know.

I wasn't aware it was possible to reduce the benefits of a DB scheme if it was in someone's contract.
 
Sorry TRS80 but it does. Each scheme has to work out how to deal with the shortfall due to the pilfering of Government. By the way Benefits are not really protected, recent legislation means that despite the "Waterford" ruling the maximum protection is now €12,000 per annum
 
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