Bord Gais to move against its defined pension plan
Published 27/10/2011 | 05:00
Bord Gais is to put a radical cost-cutting package to its almost 1,000 staff -- including the ending of its defined benefit pension scheme, the introduction of performance-related pay across most of the company and a slashing of overtime.
The package is designed to deliver €115m in savings between now and 2015, John Mullins, Bord Gais chief executive, told the Irish Independent.
Mr Mullins will shortly begin discussions with unions on the package. He has also warned that if the Government insists on slashing chief executive pay in the semi-state sector it will become harder to attract high calibre candidates.
"There is a market for talent,'' said Mr Mullins, who has indicated a plan to leave Bord Gais next year.
He said the savings at the company had to be delivered and Bord Gais would be a very different company by 2015.
The defined benefit scheme will be closed off to new entrants and Bord Gais has also committed to putting no further money into the scheme.
Sixty-five redundancies are also on the cards, Mr Mullins explained, and overtime and even expenses are also to be cut back.
The package will eventually go to mediation, but the company was working off thin margins and had to stick to targets set by its bondholders and ratings agencies.
Keeping the company's investment grade credit rating was absolutely essential, said Mr Mullins, one of the youngest chief executives within the semi-state sector. He said he did not expect to see any part of Bord Gais sold off before he departs as chief executive.
He said the Government chose the ESB to be sold off first because it was worth more money. But he said Bord Gais could be conservatively valued at €2.5bn and it was producing more cash than ever before.
Mr Mullins said any buyers of a minority stake in ESB or Bord Gais would need to have a guaranteed exit mechanism. He said these buyers -- usually pension funds -- would either want a promise of an IPO or demand that the company buy back its shares.
Mr Mullins expects to move back into the private sector and is not ruling out moving overseas to work in the energy sector, he said.