The controversial case at one stage saw then-social protection minister Leo Varadkar intervene, when it looked like pensioners would be left dramatically worse off.
Now, INM and the trustees of two defined benefit pension schemes affected have confirmed they have reached an agreement to commence the wind-up of the schemes, after the company committed to make phased contributions amounting to over €50m, between now and 2023. The funds will be paid into defined contribution pensions for those affected. While the defined benefit schemes will be wound up, the extra funding will support the retirement incomes of those affected.
INM sparked controversy in 2016 when it moved to cease making contributions to the defined benefit schemes, which had been restructured in 2013, opting to only support the group’s defined contribution schemes into the future.
The uproar included protests at an extraordinary general meeting, and an intervention by now Taoiseach Leo Varadkar, who asked the Attorney General to consider whether the State could intervene in the case.
The move to wind up the schemes does not affect those already receiving a pension, but without the additional cash now committed the original plan to wind up the schemes would have seen future pensioners lose as much as 30pc of their expected retirement income.
That was on top of a 40pc reduction agreed five years ago.
INM said the agreement will not mean a change to its dividend policy – which is to retain excess cash for M&A. The agreement with the trustees, however, means the company will be able to seek High Court approval to resume dividends in future, without opposition.
Under the agreement hammered out with pension trustees, those who are closest to retirement will be in line for special extra support – because there is little time for their pension pots to build back up.
With the situation now resolved, INM has committed to pay over €70m in all in respect of members of the affected defined benefit schemes in the period 2013 to 2023.
In addition, 5pc of INM’s issued share capital was transferred to compensate members affected.
In a joint statement, INM and the pension trustees said details of the impact of the new arrangement on individuals will be communicated by letter over the coming days and information meetings will be held for staff. A helpline, operated for INM by Mercer, will also be available.
INM will continue to make substantial pension payments to its remaining schemes and is projected to invest €115m in all schemes between 2013 and 2023.