BAILING OUT the pension funds of State-supported agencies including Fás is expected to cost the exchequer well over the €1 billion originally estimated and the policy must be reviewed, according to Fine Gael.
Legislation passed more than a year ago provided a guarantee to the pension funds of some 15 non-commercial State-supported agencies in serious deficit.
Figures released by Minister for Finance Brian Lenihan indicated that the liabilities for State training agency Fás and five universities could be €1.06 billion.
Fine Gael Roscommon-Longford TD Denis Naughten said the cost for Fás alone at €267.5 million was more than one-quarter of the total original estimate for all the agencies whose pensions were guaranteed under the Financial Measures (Miscellaneous Provisions) Bill, “rushed through the Dáil in just three days”.
The agencies include universities, the Arts Council, Bord Bia, Cert, the IDA, the Irish Goods Council, the Institute of Public Administration and the Economic and Social Research Institute.
Calling for a review of the policy Mr Naughten said 15 months after the passage of the legislation to protect a number of semi-State agency pensions, the Department of Finance “still doesn’t have an overall figure” for the cost of bailing out these pension funds.
“At a time when people are suffering more cuts and economic hardship you have to question the logic of continuing to guarantee returns on these pension funds, especially when some individuals in these organisations didn’t act in the public interest.”
A spokesman for the Minister said, however, that the State had a liability for those pension funds and the policy decision had been made more than a year ago.
The legislation was necessary to allow the funds’ assets and liabilities to be transferred to the National Pension Reserve Fund and this had been done for all the agencies.
He also questioned that the costs would be as Mr Naughten suggested because final estimates would only be known as individuals retired, and pensions were “pay as you go”. In a letter to the TD, Mr Lenihan said final audited accounts had only been received for Fás and accounts for the National University of Ireland were subject to audit. The Minister indicated that unaudited liability estimates for a number of university colleges totalled €794.9 million. The largest university pension fund deficit is for Trinity College, with liabilities of €314.5 million.
The former NUI authority has liabilities of €6.2 million. NUI Maynooth has a deficit of €96.5 million. The NUI Galway pension fund hole is an estimated €132.3 million. UCC is in the red for €144.1 million, while UCD has a pension fund deficit of €101.5 million, according to the figures which Mr Lenihan said were based on a report by the Comptroller Auditor General.
Mr Naughten said “we can still only speculate as to the total exposure to the taxpayer to cover the gaps in all these pension funds. What is clear though is that this is another substantial bailout by the already hard-pressed taxpayers with figures currently running at over €1 billion”.
It was “very hard for the public to accept why we should have to guarantee the pensions for organisations like Fás where over the past three years we have heard unbelievable stories of excess by senior management at the expense of the taxpayer”.
He questioned why these semi-States were guaranteed when other funds such as those of Aer Lingus and Aer Rianta were not. “We don’t know what the implication of the final cost on Government fiscal policy will be and we are yet to see if the Government intends to make any attempt to recoup some of these costs from the organisations,” he said.
