independent

Wednesday 16 April 2014

Aer Lingus should 'put €110m into troubled pension scheme'

AER Lingus should inject €110m into a troubled pension scheme, according to the Labour Court.
AER Lingus should inject €110m into a troubled pension scheme, according to the Labour Court.

AER Lingus should inject €110m into a troubled pension scheme, according to the Labour Court.

It made the recommendation as the scheme designed to serve thousands of former and current staff at the airline and the Dublin Airport Authority (DAA) wrestles with a massive €750m-plus deficit that threatens to jeopardise future pension payments.

The scheme's trustees and unions have been trying to hammer out a solution for over a year. Unless one is found, members of the scheme who haven't yet retired would face massive cuts in future entitlements.

But the Labour Court has also said that Aer Lingus staff should effectively shoulder a pay freeze for a further three years in return for the contribution from the airline.

However, each of the airline's full-time staff members should also get a "stabilisation payment" of €5,850, over four years.

The court has also recommended that there should be no inflationary pay increases at Aer Lingus until the end of 2016.

The pay freezes and recommended halt to inflationary pay rises are certain to anger staff and unions, including Impact and SIPTU. They're likely to ballot their members regarding the proposals, but even if they accept them, a €110m injection would have to be approved by Aer Lingus shareholders – including Ryanair, which owns nearly 30pc of its smaller rival.

Aer Lingus and the DAA have both insisted that they have no legal obligation to inject any further funds into the troubled Irish Aviation Superannuation Scheme. Aer Lingus wants to move staff to a defined contribution pension scheme.

ANNOUNCEMENT

"The board of Aer Lingus will now undertake a detailed consideration of this Labour Court recommendation," said the airline.

"Following this, Aer Lingus will issue a further announcement when appropriate."

A Ryanair spokesman said yesterday that Aer Lingus should not be making any further contributions to the scheme.

Meanwhile, AIB has agreed to postpone the closure of its defined benefit scheme after the Labour Court sought details on the technical aspects of the bank's plan. The court has asked for reports on the scheme's proposed closure from experts representing both AIB and the Irish Bank Officials' Association.

Irish Independent

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