Nine jobs are lost as Cookstown RDC forced to close over pension deficit

A COOKSTOWN organisation set up to help rural areas in Northern Ireland has said political instability and a pension deficit is to blame for its decision to close down.

The Rural Development Council (RDC), was set up in 1991 and supported over 7,000 rural projects across the province during its 28 years in operation.

The charity said the reason behind the closure is due to a pension which it said is “completely beyond the control of the board”. It is understood the decision was made due to a deficiency in its pension fund of more than £3m.

It was led by chairman Tony McCusker and chief executive Teresa Canavan, and had seven members of staff.

A creditors' voluntary liquidation was ratified during a during a creditors’ meeting at the offices of insolvency solicitors Napier & Sons in Belfast on Thursday.

The RDC was set up as a government body, with staff qualifying for a pension through the local government pension scheme, administered by the Northern Ireland Local Government Officers' Superannuation Committee (NILGOSC).

Under the initial Review of Public Administration (2006-2009) the organisation underwent significant change which severed its ties with government paving the way for the organisation to continue as an independent company and, in more recent years, as a registered charity.

However, the RDC said at the time of change there was “no reason to believe that future pension demands would threaten the solvency of the organisation”.

But NILGOSC said it was not able to comment on a specific employer within the scheme and added: “In any circumstances where a scheme employer ceases to function, the pensions of members are secured and suffer no detriment.”

The RDC is estimated to have paid in around £420,000 to shore up its pensions since 2014, with the contribution for April 2018/19 put at £187,000.

Nonetheless, the deficiency has escalated to around £3m, with the funding crisis leaving it with no option but to enter a creditors' voluntary liquidation.

Speaking on behalf of the board, Mr McCusker said: “A series of unfortunate circumstances, including a substantial pension deficit, a continued annual hike in pension costs, the inflexibility of the NILGOSC pension scheme regulations and a lack of political stability, have all played a part in the closure.

“We have witnessed a number of charities closing over recent years, with increasing pension costs often being the main contributor.

“For us it is extremely frustrating and disappointing that our local government pension scheme is not doing more to protect Northern Ireland charities in the way that other government schemes are across the UK.”

He said the Government needed to find solutions other than insolvency for organisations to leave the scheme.

Mr McCusker added: “RDC has worked with and supported over 7,000 rural projects during its 28 years in operation.

“We hope that those communities empowered by local action continue to champion rural issues and we thank all those who we worked with over the years for their commitment and dedication to advancing rural Northern Ireland.”

The Department for Agriculture, Environment and Rural Affairs (DAERA) dismissed any suggestion that the council could have benefited from a letter of guarantee from the Government, in which the Government would pledge that it would honour pension contributions in the event of collapse.

”The RDC is not a public body and the department has no responsibility for the RDC pension liability,” said a DAERA spokesperson.

“There would be no reasonable basis upon which to make a request for permission to guarantee such a liability.”

The Ulster Farmers’ Union says the decision to close the Rural Development Council (RDC) is yet another blow to rural communities. It says this will leave those living there even more cynical about assurances that government policies are rural-proofed to minimise discrimination between urban and rural areas.

“For over 25 years the RDC was a voice for rural communities. It helped bring a large number of projects to fruition, helping offset the steady loss of public and private services in these areas. That it fell victim to a pension deficit problem that it tried to resolve with government is a further example of the fallout from our political paralysis in Northern Ireland,” said UFU deputy president Victor Chestnutt.

The UFU says pressures on rural communities have seen the Union having to expand its role beyond farming in recent years. The Union has been to the fore, with the support of bodies like the RDC, in areas including education, medical provision, transport and services being lost from rural towns. 

“This is a tough battle and it was good to know we could work with a body like the RDC to battle a culture that makes rural communities the first target when spending cuts bite. We will continue fighting that battle. But it is fundamentally wrong, and a disservice to people in these areas, that ways could not be found to prevent the closure of an organisation that has helped bridge the urban/rural divide for 28 years,” said Mr Chestnutt.

The UFU says it regrettably accepts the decision on the RDC cannot be reversed. It says, however, explanations are needed as to why it has been suggested the RDC was treated less favourably here than would be the case elsewhere in the UK over the resolution of a pension issue.

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