Farm Ireland
Independent.ie

Wednesday 17 January 2018

Co-op workers facing pension reduction

Declan O'Brien

Declan O'Brien

Thousands of workers with the country's dairy co-ops and co-op marts could be facing major reductions in their future pension benefits.

A letter from the trustees of the ICOS pension fund has warned members that its defined benefit scheme has a financial deficit of close to €35m.

Assets for the scheme are understood to stand at around €105m, with liabilities close to €140m.

It is understood that ICOS is in discussions with both management at co-ops included in the pension scheme and with worker representatives and unions to identify a solution to the problem.

CUTS

The pension fund trustees have warned members that they are likely to face cuts in their pensions under a restructuring plan. Such a move is termed a Section 50 application under the Pensions Act and would be subject to the approval of Revenue.

However, any cuts in benefits would not affect members who are already retired, and an increase in employee contributions to the scheme has been ruled out.

The objectives of the restructuring process are:

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* To reduce the benefits sufficiently to address the deficit in the scheme;

* To preserve as much of the benefits as possible;

* To put in place a structure that is reasonably sustainable.

While ICOS declined to comment on the pension fund deficit, it is understood that talks are continuing with both unions and employers on the issue.

If the Section 50 application is successful, unions will be balloted to seek worker support for the move.

Simultaneously, participating employers will be asked to endorse the new structure.

The trustees claim that the pension will continue as a defined benefit scheme if the restructuring process gets the green light.

However, they warn that they cannot anticipate what may happen if the proposed changes are rejected.

Irish Independent