New legislation will be required following a Government decision to grant staff at the Central Remedial Clinic (CRC) access to a public service pension scheme following the collapse of the charity’s private plan.
Staff threatened industrial action after the board of the CRC unilaterally decided to cease making further contributions to the private pension scheme in place after the deficit grew to €2.3 million plus risk reserves of €2.7 million.
The board of the CRC asked the Government to permit staff to access the Single Public Service Pension Scheme (SPSPS), despite Minister for Health Simon Harris previously insisting it was “not possible” as the 44 individuals concerned were “ineligible”.
The HSE wrote to the CRC on July 11th to outline how the scheme “can only be applied to persons who were not pensionable public servants on December 31st, 2012”. As the CRC is classified as a Section 38 body, its employees are deemed to be public servants.
“The case for these 44 staff to be admitted to the SPSPS will depend on the interpretation of their membership of the existing pension plan on December 31st, 2012, i.e. would they be regarded as pensionable public servants on that date,” said the HSE.
The surprise move by the Government to grant access comes following the presentation of a business case by the CRC to the HSE, which was followed by talks with the Department of Health and the Department of Public Expenditure.
“Some staff admitted to the [PRIVATE]plan described being given no choice,” said the CRC document. “Many described requesting to remain on their State superannuation scheme and specifically recall being told at the time that this was not possible.”
The document, which has been seen by The Irish Times, also recalled how in 2013 the CRC was "catapulted into a public scandal surrounding salary levels", and that access would "prevent the erosion of good will and morale that has required restoration in the aftermath of the scandal".
The charity added it was “vital to effective delivery” of its service commitment, and that it was “irrational” that colleagues with the same job and conditions are differentiated in terms of pension.
In response, the HSE told the CRC no public funding would be made available to shore up the private scheme, but “pension provisions in respect of the former active members of the CRC plan would be provided by way of access to SPSPS for future service only”.
“This will mean that while relevant staff members would have access to the SPSPS with effect from the date of the windup of the scheme, their previous membership of the plan, and any benefits accruing, would have to be dealt with as part of the wind up.”
A spokesman for the Department of Public Expenditure confirmed that, in effect, employees would enter the scheme from the date the private plan was officially wound up, and would receive a pension for years worked from that date on.
The spokesman said the cost to the State could not be calculated before the individuals in question enter the scheme and their details of employment and years of service become known.
The SPSPS is calculated with career average earnings. A pension and lump sum amount accrue each year and are up-rated annually by reference to the Consumer Price Index.
Impact industrial relations officer Ian McDonnell, who has been dealing with the CRC staff, said the 44 individuals include “chefs and bus drivers, while we also have people on middle income salaries like clinicians, physiotherapists, and managers”.
He said the age profile involved was 40-55 years old, but that “a small number” were due to retire in the next five years. Furthermore, there were “only a handful” that had been entirely dependent on the private scheme having been on it since their twenties.
