The initiation of Bank of Ireland’s new chairman, Akshaya Bhargava, continues this week as he gets to meet a smattering of small shareholders at its annual general meeting (AGM) on Thursday.
Another group also plans to make their presence known: bank pensioners who feel they’ve been dealt a raw deal.
At issue are pledges that Bank of Ireland made as far back as 15 years ago to review crisis-era cutbacks to entitlements on its defined benefit (DB) pension scheme. This scheme, where benefits are linked to a worker’s final salary, was closed to new entrants in 2006.
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For the past dozen years pension increases have been essentially capped at 3 per cent – or 4 per cent, minus a 1 per cent clawback – while newly retired individuals get no rise for the first three years. Irish inflation was running at 7.8 per cent and 6.3 per cent, respectively, in 2022 and 2023, though it has come back significantly since then. It was running at 2.2 per cent in April.
The bank’s defined benefit pensions recorded a €1 billion accounting surplus at the end of last year, according to the group’s latest annual report. Bank Staff Pension Fund (BSPF) was estimated to have a €20 million-€30 million “real money” surplus, as measured by the trustees, according to the bank.
Disgruntled former staff got little satisfaction when they challenged then chairman Patrick Kennedy on the ongoing caps at last year’s AGM.
This year, they’ve upped the ante and plan to hold a protest – organised by the Financial Services Union (FSU) – outside the AGM at the Intercontinental Hotel in Dublin 4.
“The bank made a commitment in 2010 and 2013 that when profitability stabilised and normality returned, there would be a review of the cutbacks made to the scheme. The profitability transformation has been more than achieved – bank profits now exceed pre-crash levels,” the FSU said in a note sent out last week to Bank of Ireland pensioner members.
The bank, for its part, says the trustees of the fund have a responsibility to provide security and stability to all 17,000 members of the fund – not just the 6,000 drawing a pension. Since 2010, the bank has injected more than €1 billion of additional funding into the scheme, it said.
“Over the same period, many other Irish DB schemes have closed to future accrual or been wound up,” the bank added. “The BSPF is one of a small number of DB pension schemes which has managed to remain open and continues to provide valuable benefits.”
