Pfizer Ireland, Dublin, will begin to transfer 900 employees into a new defined contribution plan from its defined benefit plans on April 1, a spokeswoman said.
Following five years of negotiation between the company and unions, Pfizer employees rejected a recommendation from the Labour Court, Ireland's industrial relations tribunal.
The Labour Court recommended that the pharmaceutical company provide employees with lump sums of up to €35,000 ($40,000) — to replace the existing defined benefit assets — and a DC plan with a 15% annual employer contribution. Employees enrolled into the fund would also get an extra annual 14% contribution if they transferred early in the process. The size of the pension funds could not be learned.
The Labour Court also recommended that for employees who do not move to the DC plan early, an additional three to seven years of accruals in the defined benefit plans be made available and also an option based on age to stay in the pension funds until they retire or leave the company.
The company has not proposed terminating the pension funds, the spokeswoman said.
Following the decision from the Labour Court, Pfizer is within its rights to implement the changes, the spokeswoman said. "The company has informed all colleagues impacted that the new pension proposals will be implemented from April 1," she said.
Pfizer said the cost of funding its defined benefit plans has risen 1,000% since 2009 and these costs are affecting the competitiveness of the firm's Irish operations.
"Pfizer is disappointed that the outcome of the union ballots support industrial action. Pfizer has accepted the Labour Court recommendation, which includes enhanced terms and transitional arrangements," the company said in an emailed statement.
Officials at the Official at Services Industrial Professional and Technical Union, which represented Pfizer employees, was not available to comment.