Expert panel tells Aer Lingus to hike pension contribution to plug €780m hole
Published 16/06/2014 | 12:48
AN expert panel has asked Aer Lingus to hike its contribution to shore up a €780m hole in a ‘crisis-hit’ pension scheme to €146.7m for existing staff.
The airline had earmarked €110m for current staff.
It has also ringfenced another €30m for deferred members, who have left the company but not yet retired.
But it will now have to come up with another sum on top of this, which has not been determined.
This will bring its total contribution to in excess of €176.7m.
The Expert Panel on the Irish Airlines Superannuation Scheme (IASS) has also recommended that the Dublin Airport Authority increase the sum it will pay to €57.3m.
Aer Lingus Chief Executive Christoph Mueller had called for the report to be delayed because he believed shareholders would not accept its proposals.
Dublin Airport Authority said it will review the report in detail and “revert to the expert panel as appropriate”.
It said it was a priority for it to resolve the long-standing, complex issues that have impacted the scheme and establish new, “soundly-based”, arrangements for the benefit of all employees.
In a market announcement, Aer Lingus noted the report required it to pay €146.7m and “a further, non-quantified amount” in relation to deferred members of the scheme on top of €30m the airline previously proposed.
The airline said it will review the Expert Panel’s report and will issue a further announcement in due course.
The panel, set up last March when strikes were threatened over the pensions shortfall, issued its recommendations in a bid to end the row today.
The panel recommended that lower-paid staff should make lower contributions in future.
It said new separate defined contribution schemes should be set up with agreed contribution levels.
The panel said employers should make a once-off contribution to take account of elements of pay that are not pensionable.
It also recommended that the IASS Trustee should meet with employers to agree how funding should be made available to deferred members.
It said its recommendations should be put to members of the scheme “without delay”, with a recommendation for acceptance.
The panel presented its final report to the Department of Transport, Tourism and Sport, the Department of Jobs, Enterprise and Employment, Ibec and the Irish Congress of Trade Unions this morning.
The panel is made up of former IBEC director Brendan McGinty, former IMPACT general secretary Peter McLoone, Eugene McMahon of Mazars and Laura Gallagher of KPMG.
The aviation pension scheme, which has over 14,000 members, covers current and former workers at Dublin Airport Authority, Aer Lingus, Shannon Airport Authority and former SR Technics staff.