RTE pensioners do not qualify for the old age pension. The RTE pension is the only pension they have. It has not increased since 2008. Over 20% of RTE pensioners receive less that the state old age pension. The state pension has increased by 16% since 2008.
The National Pensions Framework was published almost 10 years ago and it committed the Government to benchmarking the Old Age Pension at 35% of average weekly earnings.
The RTE Pension has always been linked to National Wage Agreements – It has effectively previously been linked to public service pensions.
Earnings up 3.4% in year to Q3 2019 (Central Statistics Office CSO)
Earnings up 3.3% in 2018 CSO
Pension Levy
In 2011, legislation was introduced establishing an annual levy of 0.6% of pension scheme assets payable for the four-year period 2011-2014 (inclusive). The legislation was subsequently amended to increase the 2014 levy to 0.75% of pension scheme assets for that year and to apply a further levy of 0.15% for 2015. The total of pension levy payments , from the RTE Pension Fund, made in the period 2011-2015 amounted to €22.96 million.
The trustees, in the absence of an offer from RTÉ to pay the levy, decided to reduce members’ accrued benefits (as permitted under the levy legislation) to avoid a deterioration in the scheme’s financial position. The following reductions were made: a total of 2.32%
|
Year |
Reduction in accrued benefits |
Date reduction implemented |
|
2011 |
0.60% |
1 November 2012 |
|
2012 |
0.54% |
1 October 2013 |
|
2013 |
0.58% |
1 October 2014 |
|
2014 |
0.60% |
1 October 2015 |
|
2015 |
Nil |
n/a |
So while state pensions increased by 16% – RTE pensions reduced by 2.32%.
The fund is well capable of paying increases.
ACTUARIAL VALUATION REPORT AS AT 1 JANUARY 2019 RTÉ SUPERANNUATION SCHEME
The scheme comfortably meets the Pension Authority’s Minimum Funding Standard.
“The scheme’s capacity to satisfy the Funding Standard Reserve requirement is confirmed in a Funding Standard Reserve Certificate. The certificate shows that the scheme satisfies both the FS and the Funding Standard Reserve requirement to meet the statutory funding regime.”
The Scheme shows a surplus after allowing a 1% increase in 2018 – which never happened.
Under the minimum funding standard the cost of buying annuities for all pensioners & all members over 60 – which make up over 96% of members comes to just €787.3 while the assets of the scheme are €1000m.
Pension Increases; Pensions are increased at the discretion of the Minister for Finance, and in previous years they have generally tracked salary inflation.
“2.7 Pensions in payment may be increased by such amount as may be authorised from time to time by the Minister for Finance. Pensions are assumed to have increased by 1.0% in 2018 for the purpose of the ongoing and economic valuations of the scheme liabilities. This is in line with the application which I understand has been made to the Minister in 2018. I have made provision in the ongoing valuation for some level of future increases to apply (see 3.32).”
(NOTE : THE RTE FUND HAS AVERAGED A 6% RATE OF RETURN OVER THE LAST 5 YEARS)
“Ongoing valuation results.
Within the ongoing valuation, we consider two scenarios:
(a) The funding target basis, which measures liabilities by discounting future expected benefit pay-outs at a target rate of return expected to be earned on the scheme’s assets. We have therefore assumed pension increases of 2.0% per annum for the funding target For this purpose, we have used multiple, time-based discount rates that equate to an average single rate of return of 2.51% p.a. This measure is based on the expected return from the anticipated mix of equities, bonds and alternative assets held by the fund. The fund of €997.9m covers 105% of past-service liabilities of €952.9m, giving an excess of €45m. Adding the past-service excess to the future-service shortfall gives an overall excess of €42.5m.
(b) “The economic basis is useful as a comparator if a ‘least-risk’ approach were to be adopted.”
“The economic basis, which measures liabilities by discounting future expected benefit pay-outs at the rate of return available on low-risk securities (e.g., sovereign bonds). This gives a measure of the scheme’s finances if all the assets were to be exclusively invested in sovereign bonds and only this level of return were to be anticipated. For this purpose, we have used an adjusted swap curve basis to value the liabilities that equates to assuming an average return of 1.0% p.a., reflecting yields available 1 January 2019….We have assumed pension increases of 1.58% per annum for the economic value of the liabilities.”
Even with these assumptions the Liabilities in the scheme for all pensioners – the liabilities come to €878m and the current assets come to €1,000m
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