The Workplace Relations Commission (WRC) is to be asked to act as conciliator in a dispute between KBC Ireland and staff who are members of the Financial Services Union over terms and conditions governing the bank’s plans to leave Ireland. The bank, which has been based in Ballsbridge for over 40 years, is to move its Irish arm to the UK.
It announced the plan after RTE broke a story that KBC Bank Ireland was one of three banks that had failed ECB stress tests. The other two were Permanent TSB and Anglo Irish Bank. The move is to cost up to 150 jobs.
What does this mean for people with a pension?
The first thing you should check is whether your pension is in deposit or unit-linked.
If you have a unit-linked pension plan, it means your funds are invested in the stock market. This is most suitable for people who want to take a little more risk with their money, because the funds are invested in shares, shares in companies etc. If things go right, you could get a much better return on your fund than if it was just sitting in a bank account.
In this case however, having a unit-linked pension plan could ultimately protect you from the implications of KBC’s exit, as your money would most likely still be invested in companies based outside the UK. Your money is therefore probably safer than if it was in your bank.
If your savings or unit-linked pension is with KBC, people may need to transfer their pensions to another provider and also will receive a reduced monthly income. However, with all transfers there is a charge, with the amount depending on your age and how many years you have been in pension. For example, if you are 59 years of age and have been in pension for 15 years there is a charge of 10%.
Contact your financial adviser to find out what will happen to those assets now they’re leaving Dublin and relocating to London.
What if I have a deposit-linked pension plan?
This means that instead of putting your money into shares, you put it into a bank account which has fixed interest rates (you will probably only get about 1% on this type of account currently). These accounts are less risky for the bank because they are lending your money out on mortgages etc.
If you have a deposit-linked pension with KBC , it is likely that you will receive a reduced monthly income now they’re leaving Dublin, but your deposits are probably safe. After all, why would the bank let its customers’ funds be affected if their plan is to leave?
What if I have a pension with another company, but it is linked to KBC?
If you have a regular income coming from your pension and this regular income goes through one of the Big Four* banks, such as Bank of Ireland, AIB etc. then there is no need for concern. Your bank won’t be affected by KBC’s move and you will continue to get your regular income. However, if the money goes straight into your bank account, rather than through a pension fund, then it is advisable to contact your financial adviser.
Who will be affected?
The Financial Services Union has called on the bank to rethink its decision. KBC Bank Ireland chief executive Willem Maas said it was “not possible “to continue being an Irish bank following the move to London.
He also confirmed that staff would be offered an “incentive” to leave their positions early and added that those who choose not to accept the incentive were “able to avail of a generous severance package.”
Therefore currently this move only affects KBC staff in Ireland but there are no guarantees it won’t soon affect KBC employees all around the world.
What if I don’t know where my pension is?
If you are unsure about whether your pension is invested in deposit or unit-linked, the best thing to do would be to contact your financial adviser. They will tell you exactly what is happening with your money and what you should do next – if anything.
It is important to be aware of the implications that KBC’s move may have on your investments, and it might also be a good idea to contact Gallivan Financial Advisers for pension advice. Our team can offer you free one-on-one advice with an expert in finance or pensions.
Contact us today for peace of mind at firstname.lastname@example.org