Calling its pension cost increases “not sustainable,” Pfizer says it will end its traditional pension plan in Ireland and move employees there to a defined contribution scheme. It's part of a companywide, global shift away from defined benefit pensions.
Beginning in 2018, the pharma’s Irish operation “is proposing to close its employee non-contributory defined benefit pension plans,” spokeswoman Joan Campion wrote to FiercePharma. The change--part of a global effort by Pfizer ($PFE)--is due to the “cost and volatility” of the program.
“In Ireland, the cost to the company of funding these non-contributory plans has tripled between 2012 and 2014, and these increases are not sustainable,” Campion said.
The trade union Siptu is balking at the proposal, however. In a legal challenge, Siptu argued to the country’s Labor Court that the program “is in a healthy position and it is not in deficit,” the Irish Examiner reported. Pfizer said to the court that its defined benefit employees had cost it an additional €10 million over 5 years, according to the publication.
The court told the two sides to work together on a plan that would “meet the twin objectives of aligning the company’s needs and the benefits contained in the current scheme,” IE reported.
Pfizer employs about 3,200 people in Ireland, with 2,200 already on the defined contribution plan. The switch would affect remaining employees at its Ringaskiddy and Little Island plants, plus global financial and sales personnel.
In the U.S., the company’s employees have both defined benefit and defined contribution plans, according to Pfizer’s most recent 10-K. But back in 2012, it announced that it would transition employees in the U.S. and Puerto Rico to a savings plan from defined benefit plans, also beginning in 2018.
- here’s the Irish Examiner story
- get more from The Actuary
Related Articles:
J&J trims pension benefits for new hires
Stada CEO 'happy' to take 40% pension cut. Sound foreign, U.S. pharma chiefs?