Mandate Trade Union says wind-up of Arnotts’ Pension Scheme could mean 50% loss on pension promises of current and former staff
Monday 26 November 2012Mandate Trade Union says wind-up of Arnotts’ Pension Scheme could mean 50% loss on pension promises of current and former staff
The Mandate Trade Union on, Monday, 26 November 2012, expressed its outrage at the proposed wind-up of the Arnotts’ Pension Scheme saying that, based on current calculations, existing and former staff members would suffer a loss of up to 50% in their pension promise.
Mandate’s General Secretary, John Douglas, explained that the current Arnotts’ Pension Scheme has a deficit of €25 million – it has assets of €125 and its liabilities are approximately €150 million. Mr Douglas said that Arnotts – which is controlled by its creditor banks – has advised Mandate that they are not in a position to fund the €25 million deficit via lump sums or increased pension contributions so a proposal to wind-up the scheme will be considered at a Trustees’ meeting on 7 December 2012.
“The impact of winding up the Arnotts’ Pension Scheme now would be twofold. Firstly, the assets of the scheme would be realised to secure the pensions of the 300 people currently on pensions – this is likely to cost in the region of €100 million. The remaining assets would then be divided between the 300 current staff and 300 former employees in the scheme to calculate a transfer value.
“Based on current calculations, they will suffer a very significant ‘haircut’ to their pension promise and our advisors estimate that this loss could be as much as 50%.
This is why our pension advisors believe that winding-up the Arnotts’ Pension Scheme at this time is the worst possible option for current staff and deferred pensioners.”
John Douglas said that he has explained to Arnotts and their creditor banks that their proposed actions on the pension scheme are pre-emptive and that alternatives are available which could help current and former staff get a better deal.
“We have also expressed our concerns about the direction the Arnotts’ Pension Scheme is going in to Ministers Burton, Bruton and Noonan and we understand that some members of the Oireachtas will be raising the matter too.”
Concluding, John Douglas called on Arnotts and their banks – in recognition of the sacrifices made to keep the company afloat by current and former staff – to ensure that all stakeholders are treated fairly in relation to their pension promise.
