Aer Lingus agrees to stump up €191m to plug pension gap
‘Reluctant’ move also involves €44m payment for deferred members following expert group recommendation
Published 27/06/2014 | 08:35
AER LINGUS has agreed to increase a once-off payment to its current pension scheme from €110m to €146m following recommendations from an expert panel.
The airline said it "reluctantly" accepted the recommendations to solve to row over its pension plan after unions and management failed to implement Labour Court plans.
The increased payment to €146m is for the current scheme while it will also make a payment of €44m, up from €30m, for deferred members.
The €30m had already been proposed so the recommendation will now include an additional €14m.
Chief executive Christoph Mueller said the implication will be a significant hike in payments from the company.
"The aggregate effect of the variations recommended by the Expert Panel and discussed with the IASS Trustee is to increase the total once-off payment to be made by the company from €140m to approximately €191m, in addition to implementation costs,” Aer Lingus said in a statement.
"Aer Lingus reluctantly accept the increase in payment recommended by the Expert Panel on the basis that the panel's report represents a full and final solution capable of acceptance by all the parties and would definitively address the funding issues in the IASS," the company said in a statement.
"In addition, the recommendations would place pension provision for current and former employees on a significantly improved and more stable footing than would otherwise be the case if the Scheme were to be wound up in the absence of an agreed solution," it added.
Aer Lingus said it will enter talks with ICTU and trade unions on the recommendations before it seeks shareholder approval.
"A significantly improved industrial relations environment is also a key requirement and a functioning internal dispute resolution mechanism must be established for this purpose. We strongly encourage all parties to work collaboratively to achieve these goals," the chief executive added.