Call to airline and DAA on pensions
Published 16/06/2014 | 14:12
Aer Lingus and the Dublin Airport Authority (DAA) have been told to significantly increase payments into a workers' pension fund to plug a 780 million euro hole.
Government advisers have warned the airline to pay in an additional 37 million euro to take its contributions to 146.7 million euro.
The DAA has been urged to increase its payments by more than seven million euro, taking its offering to 57.3 million euro.
The expert panel which examined the crisis-hit Irish Aviation Superannuation Scheme (IASS) also called for lower contributions to be made by lower-paid employees.
The Department of Transport and Department of Jobs, Enterprise and Innovation thanked the advisers for their work and urged all parties involved in the aviation pension fund to study the report carefully and engage constructively to get a successful resolution.
The DAA said it will review the report in detail.
"It remains a priority for DAA to resolve the long-standing, complex issues that have impacted the IASS pension scheme and to establish new, soundly-based pension arrangements for the benefit of all DAA group employees," it said.
In a brief statement to the stock exchanges, Aer Lingus said it would review the report and issue a further response at a later date.
The airline, which is 25% owned by the Government and has its main competitor Ryanair as a major shareholder, has also been advised to make an additional contribution to the pension pot for former employees who have not yet hit retirement age.
The report said the extra payment for the deferred members of the scheme should be on top of the 30 million euro previously proposed by Aer Lingus.
The expert panel was convened to carry out an urgent investigation into how strikes could be stopped over deepening disputes flowing from the Irish Airlines Superannuation Scheme.
Some 14,000 members were in the pension scheme with retirement packages severely threatened by the funding shortfall.
Other resolutions pointed to in the report include setting a new level for defined contribution schemes and also for employees to accept the proposals as soon as possible.
Business lobby group Ibec and trade union body Congress each nominated an industrial relations expert for the panel which was made up of Brendan McGinty of Stratify Consulting, Laura Gallagher of KPMG, trade unionist Peter McLoone and Eugene McMahon of Mazars.
The pension was open to Aer Lingus employees, staff at the DAA, airport staff in Shannon and SR Technics workers, including those based at Dublin plant before its closure in 2009.
Siptu, a major trade union at the airline and authority, also said it would take time to study the proposals.
Dermot O'Loughlin, the union's pensions policy adviser, said: "The report of the Expert Panel is a complex document which requires detailed consideration.
"We will carefully study the report over the coming days and will consult with our members and their representatives in Aer Lingus and the Dublin Airport Authority (DAA) on its content and recommendations."