Mandate calls on Arnotts’ Pension Trustees to reconsider ‘drastic and unfair’ decision to wind up defined benefit pension scheme

Lack of governmental action on private sector pensions will leave hundreds of thousands dependent on the State for retirement income

The Mandate Trade Union has today called on the Arnotts’ Pension Trustees to reconsider their ‘drastic and unfair’ decision to wind up the company’s defined benefit pension scheme. The union’s General Secretary, John Douglas made this call ahead of a series of three meetings being held tomorrow in the Gresham Hotel, Dublin, by the Trustees with existing pensioners, deferred pensioners and current staff.

Mandate Trade Union represents the majority of staff at Arnotts and is the country’s leading retail union with over 45,000 members.

“Arnotts’ staff have made significant sacrifices over recent years to keep the company afloat since the failure of the Northern Quarter property scheme. Hundreds of workers have taken redundancy and those who have remained have had their pay frozen since a consortium of banks – including the Irish Bank Recovery Corporation and Ulster Bank – took control of Arnotts in 2007. In this context, it’s not surprising that Arnotts’ staff are shocked and disappointed at the Trustees’ decision to wind up the existing defined benefit pension scheme, apparently following consultation with the Pensions Board.”

John Douglas said that the Arnotts’ Pension Trustees’ decision is contrary to the agreement between the unions and company management on this matter.

“The unions agreed with Arnotts’ management that the existing defined benefit scheme would be frozen not wound up. This approach would have given existing staff and deferred pensioners the best chance to maximise their pension position for their retirement. Unfortunately, the Pension Trustees have taken the drastic and unfair decision to wind up the existing scheme.

“Mandate is firmly of the view that this course of action is not in the best interests of the majority of Arnotts’ employees as they will see their pension promise reduced because the Trustees are now going to proceed with a ‘fire sale’ of the pension fund’s assets. This is why we are calling on the Trustees to reconsider their decision and to engage with union representatives and our pension advisors to come up with an alternative solution.”

Mr Douglas explained that the situation in Arnotts is the latest instalment of the pensions crisis affecting private sector workers.

“The lack of vision and action at governmental action – for quite some time now – to support private sector workers’ pension schemes will mean that hundreds of thousands of private sector workers, who have tried to prudently provide for their retirements, will now be plunged into pension poverty. As a result of this government inaction, these workers will end up being dependent on the State for their retirement incomes.”

John Douglas said that the ever changing nature of the State’s ‘onerous’ pensions legislation – at a time of the greatest ever financial crisis that has faced this State – has only served to drive a stake through the heart of private sector workers’ pensions. He concluded by saying that the time for real action by Government to tackle the pensions crisis is now.