Most American companies have managed to ditch defined pension plans in the last two decades, but Pfizer is having difficulty convincing some holdouts at manufacturing plants in Ireland. After fighting Pfizer over the proposed switch for five years, workers will now decide where to make a final stand even though the company offered them added perks to make the change.
About 900 union employees have rejected a labor court recommendation that they accept Pfizer’s offer and will now vote on whether to take some kind of labor action, the Irish Times reports. Most of the holdouts work at Pfizer plants in Ringaskiddy and Little Island in County Cork, with the rest employed in shared services and commercial operations in Dublin. Results of the vote are expected by the end of the month.
“Pfizer is disappointed that the unions have balloted and rejected the Labour Court recommendation on pension changes,” a Pfizer spokeswoman said today in an email. “Pfizer has accepted the Labour Court recommendation which includes enhanced terms and transitional arrangements compared to previous proposals.”
Pfizer says its cost to fund its so-called defined benefit pensions, in which employees make no contribution, have gone up 1,000% since 2009 “and these costs are affecting the competitiveness of Irish operations.” It said that its remaining 1,400 workers in the country have already made the change over to direct contribution plans.
According to the Irish Times, the labor court recommended that workers over the age of 50 be allowed to keep their current pension plans until they retire and the rest of workers between the ages of 35 and 50 have them phased out over three, five and seven years. In addition, it recommended that an initial lump sum of €10,000 be paid to the workers to “reflect that future pension arrangement will be contributory for members,” the newspaper reports, stipulations that Pfizer has accepted.
But members of the Siptu union argued before the court that the current pension is integral to its union agreement with Pfizer and workers were unwilling to make the tradeoff.
While Pfizer is expanding a biologics plant in Dublin, a move that is expected to add about 350 workers there, it has been trying for some years to cut costs at the plants in Cork.