Enda Kenny will receive a lump sum payment of €378,000 and an annual pension of €126,000 The figures would bring the outgoing Taoiseach’s pension pot to over €2m.
On the issue of pensions, we must acknowledge that the average level of public pension in this State is €23,000. By January 1, 2018, anybody earning a pension below €32,400 will see the public service pension reduction eliminated. There are no princes or princesses in our party. We are a party that represents all levels of society, those with and those without.”
Public Expenditure Minister Paschal Donohoe in the Dáil last night
Fine Gael TD Noel Rock wrote a column about Independent News and Media (INM) and its pension cuts – some of which will amount to 70% – describing the company’s moves as “appalling”.
He also referred to the pockets of INM’s biggest shareholder, Denis O’Brien, without naming him.
Mr Rock wrote:
“… But what shifts it from appalling to repugnant is that INM is a massively profitable company, in large part because workers agreed to write down the value of their pensions by 40 per cent in 2013.
“INM announced some months ago that it made a profit of €37 million in 2015. It will have a Euromillions Jackpot figure of €87 million in pure cash burning a hole in its corporate pockets by the end of this month.
“…Sadly, and wrongly, this is not illegal in Ireland. It is in Britain.
“…While Minister for Social Protection Leo Varadkar is investigating the possibility of intervening in the forthcoming High Court hearing on the capital restructuring of INM and asking the court to consider appropriateness of capital restructuring when it’s closing this pension scheme, it’s certainly worth asking if a “wait and see” approach is good enough, or whether we need to directly intervene.
“…[INM shareholders] also benefited when banks, including the state-owned AIB as well as Bank of Ireland, wrote off almost €140 million in INM debt. These are banks that we bailed out.
“So every single person in Ireland was involved in the indirect bailout of INM. We wrote off their debts, and they crushed their own pensioners to the tune of two-fifths of their entitlement.
“We didn’t take that hit as a society so that, three years later, the company would come back, throw its pensioners under a proverbial bus, and suck all the money out of the company for the shareholders we, effectively, did a deal with.
“Nor did we do it so that the company could use the cash it is taking off pensioners and transfer it directly into the pockets of its largest shareholder, by buying Newstalk or any other asset he happens to have.”
Protest outside the INM egm, Alexander Hotel, Dublin 2 on Monday
We have come to a dividend in the road.
David Wall writes:
As the Christmas approaches the Gardaí have issued a well-timed reminder to be vigilant about theft. Key times for shoplifting and bag snatching are identified as being afternoons on Thursday, Friday and Saturday.
This time of year is busy: Christmas parties, Christmas shopping general goodwill and merriment doesn’t come cheap so we do need to be careful with our possessions.
What the Gardaí did not give a warning about was pension snatching. Understandably so, because this is not illegal; morally reprehensible but not illegal. What makes it worse is the reasoning behind the theft: dividends.
These pensions are not being abused to save a flagging business, nor are they simply gone. No, instead they are being used to pay dividends. To create a payment that is unnecessary. Who the share-holders are is interesting, but irrelevant. What matters is the action they are taking.
Interestingly, Leo Varadkar has spoken to the Attorney General with regard to this but little has come of it yet. Is this Leo’s chance to ride in on his steed and save the day, just in time for Enda to retire?
But Varadkar’s heroic actions shouldn’t be needed. Why are the board members of INM allowed to steal from a pension pot that was already agreed? They don’t have to offer the defined benefit scheme to new entrants as their business model evolves, however surely there is a moral obligation to honour such a longstanding agreement.
This is an opportunity for the men and women who run our country to take a positive strong stance and actually take a strong role in helping the people they represent.
The government could finally take affirmative action against white collar crime rather than setting up toothless, costly inquiries. Now is the time for the government to show that democracy works and that the government can and will work for the majority.
I commend Leo Varadkar for taking the public step of discussing this with the Attorney General, I only hope that this is not a fruitless discussion.
Further to yesterday’s vote by the board of Independent News and Media to give shareholders a dividend while closing off the company’s pension scheme – and the protest by former and current employers over the same…
During Order of Business in the Dáil.
Fianna Fáil TD Willie O’Dea asked Taoiseach Enda Kenny if he found it acceptable that “a solvent, profitable company in this country, can change and close down a defined benefit pension scheme, on a whim – to the detriment of their pensioners and deferred pensioners”?
Readers will note that Mr O’Dea didn’t specifically name Independent News and Media (INM) and neither did Mr Kenny in his reply to Mr O’Dea….
Willie O’Dea: “There’s an implied recognition in the Programme for Government that the pension problem in this country needs to be dealt with. Now, can I ask you: do you find it acceptable that a solvent, profitable company in this country, can change and close down a defined benefit pension scheme, on a whim – to the detriment of their pensioners and deferred pensioners and there is no provision in Irish law to deal with it. Can you tell me when such a provision will be put in place?”
Enda Kenny: “There is no law, no legislation governing this, in respect of Ireland. As you know, there are two defined benefit pensions in respect of the case that you’re probably referring to. In Britain, they have a defined benefit which is based upon levies and only becomes of, only becomes, is only used when the company involved becomes insolvent. The measure, company, we refer to now, is not insolvent. This is a matter in respect of defined benefit contributions that has caused quite a difficultly, a number of difficulties, over the period. Obviously, the last actual certificates filled by defined benefit schemes with the Pensions Authority show that over 60 per cent meet the standard and the remaining schemes had recovery plans. And there is concern that the certificates due in the coming months will, however, show significant deterioration.”
“The operation of a pension scheme is, in the first instance, a matter for the trusteesof the particular scheme. The minister met recently with the chairperson of the Pensions Authority. He’s asked the authority to report back to him with an assessment of the current overall position in relation to defined benefit schemes. So he will report to the House when that comes back.”
Social Democrats TD Catherine Murphy also raised the matter but did specifically mention INM.
Catherine Murphy: “…Taoiseach, do you now accept that there is a gap in the law that is leaving a group of people, we’re seeing with one company, INM, the Independent newspapers, we’re seeing them – whom have the benefit, mind you, of €130m-plus being written off by AIB and the Bank of Ireland – leaving people who’ve worked in that industry, they’ve deferred their pensions in a lot of cases, leaving them very exposed because of this gap in the law.”
“There’s an urgency about this and other companies doing exactly the same thing. Taoiseach, do you not see that there is a need for urgent legislation in respect of this gap in the law?”
Kenny: “Well, the point is that, in the UK, there is a pension protection fund which is paid for by levies, but it only comes into use when the company is insolvent and the company you mentioned is not insolvent. Clearly, the…
Ceann Comhairle: “The Taoiseach, without interruption.”
Kenny: “The minister has met with the chairman of the Pensions Authority. He’s asked him to report back on the issue of defined benefit pensions. The situation that will arise over the coming months and coming years, obviously, we’ll deliberate on that when he, when he has that report back…”
Staff at Independent News and Media are to protest outside a company meeting today over a 70% cut to their pension benefits.
Earlier this month INM announced it would no longer be contributing to the defined benefit pension scheme, which will now have to close.
Separately, the company will today seek shareholder approval for measures that would permit the resumption of dividend payments for shareholders including businessmen Denis O’Brien and Dermot Desmond, who between them own almost 45% of the company.
In 2013, Independent News and Media restructured its defined benefit pension scheme.
Under that ten-year plan, staff had to accept benefit cuts of around 40%.
But last month INM announced that it would cease contributions to that scheme citing factors including regulatory funding requirements and falling bond yields.
In 2014 for instance, Mr Ahern was paid a ministerial pension of €81,140, on top of which he received an additional €53,291 from Leinster House, totalling €134,431. In 2011, he received significant farewell payments including a ‘termination lump sum’ of €16,404 and another ‘lump sum’ payment of €159,873.
Following Mr Ahern on the list is another former Taoiseach, Fianna Fáil’s Brian Cowen who has been paid €726,367 according to the figures. His payments mirror almost exactly those of Mr Ahern and his pension – both ministerial and Oireachtas combined – is worth €134,379 annually.
Next on the list is the former Tanaiste Mary Harney, who according to the figures was paid €647,406. Her annual pension is currently worth €116,987, which is almost €13,000 less than she was being paid in 2012 due to a series of budgetary cuts, which have seen payments for all retired politicians reduced.
The Government plans special legislation to cut the pensions of the highest-paid former public servants by some 5 per cent.
Although the move is part of a general cut in all public pensions above €32,500, the greatest reductions will be imposed on senior figures who held high public office and those who led State and other public institutions.
Those affected by the measure include former taoisigh Bertie Ahern, Brian Cowen, John Bruton and Albert Reynolds and many members of the previous government.
Mr Ahern and Mr Cowen will see their pensions cut to €142,655 from €150,163 under the move; Mr Reynolds’s pension will drop to €141,513 from €148,961;and Mr Bruton’s pension will fall to €134,728 from €141,819.