Business Irish

Saturday 24 August 2019

Aer Lingus pension funds still in escrow

Aer Lingus chief executive Stephen Kavanagh
Aer Lingus chief executive Stephen Kavanagh
John Mulligan

John Mulligan

More than €46m of a €190.7m funding pot set aside by Aer Lingus in 2014 to resolve a pensions dispute remained in escrow at the beginning of this year.

The airline provided the money as part of a deal to establish a new defined contribution pension scheme at the carrier and involved a revamp of the Irish Airlines Superannuation Scheme (IASS) that serves thousands of current and former Aer Lingus workers. The IASS also included staff from the DAA.

The IASS had a massive deficit approaching €800m and a solution was required to avoid it being wound up.

As part of the deal and in order to access the new pension funding made available by Aer Lingus, members of the IASS had to sign a document waiving their rights to any legal action against the airline, the IASS or its trustees.

Newly filed accounts for Aer Lingus - whose CEO is Stephen Kavanagh and which is now part of IAG - show that 68.2pc of waivers had been executed by the end of January this year, resulting in €144.6m having been freed up to be administered under the new pension scheme of those members.

But the accounts show that at that date, waivers in respect of a total of €46.1m of the €190.7m funding had not yet been received. Fixing the pension problem was key to IAG moving to buy Aer Lingus.

Irish Independent

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