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Company Closures.

Dáil Éireann Debate, Wednesday - 29 September 2004

Wednesday, 29 September 2004

Ceisteanna (34, 35)

Seymour Crawford

Ceist:

216 Mr. Crawford asked the Tánaiste and Minister for Enterprise, Trade and Employment if she and the Government are taking further steps to make sure that there is parity of esteem between the IFI workers in Belfast, Arklow and Cork; if her attention has been drawn to the fact that the Northern Ireland workers in IFI are very aggrieved that they are being treated in a completely different way to their colleagues in Arklow and Cork; her views on whether this unfair treatment is at serious variance to the thinking and aspiration of the Good Friday Agreement in view of the fact that the Government is a major shareholder in this company; the amount it would cost the Government and the other shareholder individually; and if she will make a statement on the matter. [22557/04]

Amharc ar fhreagra

Freagraí scríofa

I understand that employees based in Belfast, who are deferred pensioners of the Richardsons pension fund, are likely to receive a much reduced pension and that the staff in question are, understandably, very aggrieved about this position.

The specific financial position of the Richardsons fund appears to have arisen primarily from a combination of the statutory rules which currently apply on the winding up of a pension fund in the UK and a shortfall in the assets of the Belfast fund compared with its liabilities as a result of the fund trustees' investment strategy coupled with a significant fall in the equities market.

I understand that the UK government has announced proposals to deal with the issue of pension shortfalls arising from insolvencies but I am not aware of the impact, if any, this may have on the shortfall in the Richardsons' scheme. In addition, I understand that the trustees of the Richardsons scheme have submitted a claim to the liquidator of IFI, though the status of this claim has not yet been established.

While I have the utmost sympathy for the plight of the members affected by the shortfall that has arisen in the scheme, I am satisfied that the Irish Government does not have any obligations in respect of the shortfall which the pension scheme faces and I do not see any basis on which we could reasonably be expected to make good the shortfall involved.

Without any legal obligation to do so, the shareholders jointly funded €24.5 million in ex gratia severance payments to the former IFI employees. These payments were distributed to the employees on the basis determined by the trustee appointed to manage the funds. The approach adopted by the trustee was endorsed by a ballot open to all employees. The cost of the ex gratia scheme borne by the shareholders was on top of the loss of their equity investment in IFI and the write-off of €34.5 million in loans to the company.

Liz McManus

Ceist:

217 Ms McManus asked the Tánaiste and Minister for Enterprise, Trade and Employment the situation with regard to the shortfall in the pension funds as they apply to former IFI workers in view of her comments made at the time of the closure of IFI; the amount of that shortfall; the number of trade creditors still awaiting payment and the eventual payment percentage likely; if both employees and creditors will receive the payment they are owed in full; and if she will make a statement on the matter. [22600/04]

Amharc ar fhreagra

I understand that the pension schemes covering all employees in the Republic, apart from a scheme covering two former CEOs, had sufficient funds to meet all of the entitlements provided under the scheme but that there was not sufficient funds to pay some discretionary benefits that employees had hoped to receive. I have only very limited information available about the scheme covering the former CEOs but I understand that this may have been significantly underfunded.

As regards the Richardsons pension scheme, which covered the employees based in Belfast, I understand that the scheme currently believes that it will only be able to pay active members, that is the employees still working at the time the company ceased operations, less than half their entitlements under the scheme. However, the UK Government recently announced proposals to deal with the issue of pension shortfalls arising from insolvencies but I am not aware of the impact, if any, this may have on the shortfall in the Richardsons scheme. In addition, I understand that the trustees of the Richardsons scheme have submitted a claim to the liquidator of IFI, though the status of this claim has not yet been established. Until these and other issues are determined it is not possible to precisely quantify the shortfall involved.

I understand that the liquidation is progressing in an orderly and efficient manner and that considerable progress has been made in relation to the realisation of the company's assets. However, while the company's principle properties at Arklow and Marino Point, Cork, have been placed on the market, I am advised that it may take some time to sell them.

I also understand that most of the company's obligations to secured creditors have now been settled while payments to preferred creditors, which would include some amounts due to former employees, have been or are in the course of being made. Unfortunately, it is unlikely that any payments will be made to unsecured creditors, including trade creditors, until the main property assets are sold, which I understand could take some time. At this stage, I am not in a position to determine the prospective level of payment to unsecured creditors.

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