Mr. Greg Ennis:

On behalf of the members of SIPTU in the CIÉ group, we wish to thank the committee for this opportunity to outline our members' concerns with regard to the very serious situation surrounding the CIÉ pension schemes. SIPTU is Ireland's largest trade union, with more than 170,000 members. It has the largest number of front-line trade union members within the CIÉ group. SIPTU represents more than 5,000 members in the CIÉ group of companies, that is, Bus Éireann, Dublin Bus, Irish Rail and the CIÉ holding company. Our members in these four employments are quite understandably concerned about deficits in their pension schemes. More than 1,000 of such employees, who are members of the 1951 scheme, do not have recourse to the State pension when reaching retirement, with their occupational pension being their only future source of income upon reaching retirement.

I draw the committee's attention to the documents accompanying this submission. Appendix 1 is entitled CIÉ PENSION AND SUPERANNUATION SCHEMES. SIPTU very recently came into possession of Appendix 1. We have been advised that this document was prepared by CIÉ management in 2009. In the absence of a CIÉ chairman, SIPTU requests that this committee ask the group secretary of CIÉ to confirm the provenance and validity of this highly significant document.

This document sets out the historical background to the 1994 CIÉ pensions rationalisation agreement.

As part of this agreement, CIÉ’s workforce bailed out CIÉ to the tune of £73 million and, in return, CIÉ employees were given specific commitments on the future funding of its pension schemes and also in respect of post-retirement increases for CIÉ pensioners. The commitments on the future funding of the CIÉ pension schemes were made law by way of statutory instruments, namely, SI 323/2000 in the case of the CIÉ 1951 pension scheme and SI 205/2010 in the case of the CIÉ regular wages grade pension scheme. The agreement was effective from 1 January 1994 and CIÉ honoured it in full until 1 January 2009. The active membership of both CIÉ’s pension schemes and SIPTU are adamant that CIÉ has failed to comply with its statutory contribution rules since 2009, leading to the underfunding of the schemes in the intervening nine years.

I would now like to draw the committee’s attention to Appendix 1, which contains extracts from what we are led to believe is CIÉ’s own document prepared in 2009, which are nothing short of explosive. First are extracts frompage 3, "CIE Funding Level", and page 4, "Actuarial Valuation as at 31^stDecember 2008". Due to the time constraints of my presentation, I would like to expand on these sections, citing specific extracts which are contained in the more detailed Appendix 2, when the committee deems it appropriate for me to do so. The extract from page 5 addresses "Possible Solutions". I would also like to expand on this section of the document later. The following extract is quite damning of CIÉ. I quote from what we allege is a CIÉ document:

Most CIE employees in membership of Schemes also realise that their Schemes’ Funds have not been immune to the downturn. However, many CIE employees realise that the deal in 1994 benefited CIE more than the Scheme members. They are aware of the commitments given by CIE in relation to funding etc. at that time. They will see the present predicament in which the Schemes find themselves as the time for CIE to deliver. It can be expected at the very least there will be some form of industrial action particularly in relation to point (ii). However, the bigger problem may come from a referral of the issues to the Law Courts. If that is done the rule covering the Board’s contributions will be examined. In addition, the Board’s intentions and commitments given will emerge as part of Discovery. The Minister of the day signed the Order giving effect to the terms of the Statutory Instruments (SIs). The Department of Transport and the Department of Finance were fully aware of the terms of the SIs including the mechanism triggering a review of contributions.

The more serious implications of the extracts included in Appendix 1 are as follows. First, CIÉ suspected in 2009 that it had a minimum legal requirement to at least fund its two pension schemes by an additional €11 million - that is in the last paragraph on page 4 - but that it may also have been legally necessary to fund its two pension schemes by an additional €26 million. That is in the first paragraph on page 1 and the fifth and sixth paragraphs of page 4 in the same year. Second, CIÉ expected industrial action across the company if CIÉ left the contributions rates as they were, as perpage 6. Third, CIÉ acknowledged that there may be a referral of the issues to the courts and that in such circumstances the rule covering the CIÉ board’s contributions would be examined, as per page 6. Fourth, CIÉ acknowledged that it made clear commitments to its entire workforce in respect of the future funding of the two CIÉ pension schemes and post-retirement increases for pensioners in the CIÉ pensions rationalisation agreement of 1994. That is in pages 3 and 6. Fifth, CIÉ may now owe hundreds of millions of euro in unpaid contributions to its two defined benefit pension schemes from 2009 to date.

A number of other questions now arise. First, why has CIÉ not already disclosed this document to the current CIÉ board, the Workplace Relations Commission and the CIÉ trade union group? Second, in 2009, was the then chairman of CIÉ made aware of this document and, if so, did he make the then Minister for Transport, Tourism and Sport aware of it? Third, in 2013, when funding proposals were submitted to the Pensions Authority, was the then chairman of CIÉ aware of this document? These were flawed funding proposals that made no provision for future pay increases, which the subsidiaries are now paying. Fourth, had any of the CIÉ trustees of the CIÉ pension schemes or any members of the CIÉ pensions committees knowledge of this document and, if so, what have they done about it, particularly in consideration of their legal fiduciary duties towards the 10,000 active members of both CIÉ pension schemes and the thousands of pensioners who have not had an increase in their pensions in almost ten years, since July 2008?

I will make some additional comments. CIÉ’s responses to the many parliamentary questions submitted to the Minister for Transport, Tourism and Sport correctly reference the fact that CIÉ has funded independent actuarial resources for the trade union group, TUG. However, it should be noted that when company-union discussions commenced nearly three years ago, the TUG was not made aware of the document accompanying this presentation in Appendix 1, or of the potential legal ramifications of the decisions taken by CIÉ in 2009. It is now abundantly clear to all stakeholders that the core issues that require clarification are, in fact, legal issues surrounding the CIÉ pension contribution rules, which are set in statute, that is, the law of the land. If the TUG knew three years ago what it knows now, SIPTU would have insisted on an independent legal opinion being sourced before any discussions took place in an industrial relations forum. SIPTU can fully understand now why CIÉ was happy to fund independent actuarial resources on behalf of the TUG but not an independent legal opinion.

On the matter of independent legal opinion,if CIÉ is so sure that its interpretation of the pension schemes’ contribution rules is correct, why then is it so afraid to accede to the request by its 10,000-strong workforce and 50% of one of its pension committees for funding for an independent legal opinion? The answer to this simple question is contained in the accompanying document to my submission. CIÉ itself was of the view in 2009 that it might fail to comply with the statutory instruments if it followed the course of action which, ultimately, it pursued. CIÉ has no moral or legal entitlement to deny its workforce funding for an independent legal opinion.

A complaint was made by pension scheme members on 12 October 2017 to the Pensions Authority pursuant to section 59(1)(a) of the Pensions Act 1990. This complaint is attached under Appendix 3. It references concerns that appropriate contributions have allegedly not been made by CIÉ since 2009 and in so doing contravene the two relevant statutory instruments of 2000 and 2010.

A PricewaterhouseCoopers report was commissioned by the Department of Transport, Tourism and Sport in 2002. I have a full copy of the report if the committee wants to see it and have attached the cover page and relevant page - page 71 of 115 - to the documentation supplied to the committee.Section 8.1.5 on page 71 states: "There is no limit to the employer contribution level in Scheme B." That is in Appendix 4 to my submission. Here we have a report commissioned by the Department in 2002 saying there is no limit to the contribution in the 1951 scheme.

In conclusion, the emergence of what we have been advised is a CIÉ document as per Appendix 1, entitled "CIÉ Pension and Superannuation Schemes",is a game changer. There is now an irrefutable case for funding to be made available by CIÉ for an independent legal opinion on all these matters. There is also now an irrefutable case for the Minister for Transport, Tourism and Sport to initiate an independent investigation into the governance of the CIÉ pension schemes. Finally, there is now an immediate requirement for CIÉ’s 1951 scheme pension committee to answer all of the unanswered questions which it was asked and did not answer when the same committee was fully functioning last year.

I trust that this brief submission to the joint Oireachtas committee will assist somewhat in ensuring that clarity is brought to bear on these most serious of matters affecting thousands of concerned CIÉ workers and pensioners. We respectfully request that the committee forensically probe the options, CIÉ decisions and the subsequent implications of Appendix 1,which have the potential to have an extremely negative effect on our members' pension prospects. In so doing, it is to be hoped that the committee will help ensure that action is taken by CIÉ to protect the future pension benefits of our current members, deferred members and the existing CIÉ pensioners.