Tuesday 27 September 2016

Former Aer Lingus staff to sue State on pensions

Published 10/04/2015 | 02:30

Aer Lingus
Aer Lingus

Hundreds of retired Aer Lingus workers have pledged tens of thousands of euro to a legal battle fund to launch a compensation claim against the State in relation to pension cuts.

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Pensioners recently issued a statement of claim to Attorney General Marie Whelan, Transport Minister Paschal Donohoe, and Minister for Social Protection Joan Burton.

In it, high-profile Dublin law firm LK Shields, which is representing the pensioners, demanded that the State agree to compensate its clients for financial losses it claims they suffered as a result of the State's actions.

The action, spearheaded by the Retired Aviation Staff Association (RASA), comes as the Government is considering whether or not to sell its 25.1pc stake in Aer Lingus to IAG as part of its €1.4bn takeover attempt of the Irish airline.

It's understood that a review group appointed by the Government to advise on whether or not it should sell the stake is finalising its report and that it should be completed by next week.

While there's been an expectation that the Cabinet might make a decision at its first post-Easter meeting next Wednesday, it's possible that decision might not be made until its subsequent meeting on Tuesday week, it's understood.

The pensioners' dispute relates to the Irish Airlines Superannuation Scheme (IASS) pension fund. It was insolvent and had a deficit of over €700m. Last year, an agreement was reached to freeze the scheme and launch new defined-contribution schemes at both Aer Lingus and the DAA. To address the IASS shortfall, many pensioners had their entitlements cut under new legislation that allowed for such a clawback.

Those receiving pensions of over €12,000 a year saw a 10pc cut to their entitlements, while those receiving more than €54,000 were subject to a 20pc cut.

The pensioners, who include former workers with the Dublin Airport Authority (DAA), insist that the State unlawfully facilitated a reduction in their pension benefits "by depriving them of their pre-existing right to consent to or reject any such reduction".

They demanded that the State agree to their request for compensation by April 2.

No response was received and LK Shields is now preparing to file a plenary summons with the High Court to commence proceedings. That could happen by the end of this month.

Breached

It's been previously estimated that the pensioners could shoulder a cumulative, combined reduction of €175m in their benefits over the course of their retirement.

In their statement of claim, the pensioners also insist that the State has breached their human rights and specifically "their right to peaceful enjoyment of their pension". They also allege that the State has conferred a commercial advantage on Aer Lingus and the DAA in an "apparent breach of competition and State aid rules".

Pensioners have been asked to contribute between €100 and €500 each to the legal fighting fund. Somewhere in the region of €250,000 could be required to see the case through.

RASA spokesman Paddy Kilduff declined to say precisely how much has been pledged.

Irish Independent

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