Shane Ross (Dublin Rathdown, Independent) | Oireachtas source

I thank the Deputy for raising this important issue. Matters regarding the CIÉ pension schemes are, as the Deputy will know, primarily for the CIÉ group, its employees and the trustees of the pension schemes. The employees of CIÉ group companies, that is, Bus Átha Cliath, Bus Éireann, Iarnród Éireann and CIÉ, are provided with pension benefits on retirement from one of two schemes, the regular wages scheme or the superannuation scheme.

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Both are defined benefit schemes. In common with the overwhelming majority of such schemes, both schemes are facing significant challenges in maintaining solvency to ensure prudent provision is made to fund the cost of future pensions in a low interest rate environment. In 2013, both schemes submitted proposals to the Pensions Authority, as required. The schemes demonstrated a plan that would restore the schemes to the solvency level required by the Pensions Authority by the end of 2023. This is referred to as the funding plan.

The plan consists of three strands. First, there is a funding commitment from CIÉ as schemes sponsor. Second, there is a range of assumptions around future market performance and growth in pension liabilities. Third, there is an investment strategy that would hope, over time, match movements in the value of the schemes obligations with movements in the value of the scheme's liabilities. Each year the schemes' independent actuary reports to the Pensions Authority on performance against the schemes' funding plan. At the end of 2016, due mainly to the low interest rate environment, both schemes were certified as being "off-track", or they had not reached the solvency milestone that had been set in the funding plan for the end of 2016. Arising from the "off-track" certification, the trustees of each scheme are required to submit revised funding proposals to the Pensions Authority outlining the steps being taken to restore each scheme to an "on-track" status. The trustees of the schemes have the obligation to submit revised funding plans.

There is no requirement on the trustees to consult with the trade union group or the active membership before making its submission to the Pensions Authority, and perhaps there should be. CIÉ, as scheme sponsor, considers it preferable to develop proposals on an agreed basis with the membership of the scheme. Accordingly, CIÉ has continued throughout 2017 to engage with the trade union group in order to bring about a set of proposals that could form the basis of the trustees' submission to the Pensions Authority. This process, which involves detailed discussion with employee representatives, facilitated by the Workplace Relations Commission, WRC, is ongoing in an effort to develop proposals on an agreed basis to address the "off-track matter". Some progress has been made but an agreed basis for resolution has not yet been achieved. CIÉ is on record at the WRC that it will not impose any change that it proposes without the agreement of the active members of both schemes and that it will continue to contribute to both schemes in accordance with the rules of the schemes.

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