Business Irish

Tuesday 19 November 2019

Aer Rianta: Pensions deferred are pensions denied

HELPLESS BAND: Angela Cunningham, just one of the deferred pensioners left without support. Photo: Gerry Mooney
HELPLESS BAND: Angela Cunningham, just one of the deferred pensioners left without support. Photo: Gerry Mooney

Shane Ross

Angela Cunningham is 60. She has been a lone parent, the mother of two children, since 1991. Angela has worked hard outside the home to rear her children, all her life.

She joined the great State monopoly, Aer Rianta, in 1975 and resigned after 35 years in 2010. She climbed the semi-state ladder, finishing on a salary of €53,622. She took the voluntary retirement package on offer in 2010. In the meantime, she has been drawing €18,000 from her former company.

Today, Angela feels duped. She was persuaded that the deal on offer in 2010 was attractive. She was seduced by the prospect of a €26,397-a-year pension when she reaches 65 in 2020. She was looking forward to a modest, but secure, standard of living, even if she would not be flying first-class to St Tropez every summer. At least the sum was guaranteed. Or so it seemed.

The recession has savaged Angela's future income. In recent months, she was told that she would not, after all, be receiving €26,397 in 2020. The amount had been slashed. Instead, when Angela reaches 65, she will have to live on €14,000 a year. She would never have left the bosom of the semi-state if she had been warned of the dangers.

Everyone, including Angela, understands that the pain of Ireland's economic collapse must be shared. Yet Angela is not just a victim of the recession. She is a victim of semi-state managers, of the Government, of the pension fund trustee - and, above all, of her trade union.

Last week, Angela was out marching in protest. This time, she and her fellow "deferred pensioner" colleagues were not just marching against her former employers or the Government. This time, Angela and the other victims took to the streets against their natural allies - trade unions, Siptu and Impact.

Sick of the crocodile tears shed by Government TDs outside Leinster House, "deferred" pensioners of Aer Lingus and the DAA headed for Dublin Airport. When they arrived, they surprised onlookers by turning their protest on the branch offices of Impact and Siptu. The beards of the brethren inside the buildings, pressed against the windows, were reported to be bristling with rage.

When Aer Rianta's successor -the DAA - and Aer Lingus decided to throw Angela and other deferred pensioners to the wolves, the victims turned for help to their former trade unions.

Angela paid thousands into the coffers of Siptu over her 35-year stint at the monopoly. Others have paid five-figure sums to the comrades, the guardians of their pay and pensions. Another "deferred" pensioner told me last week that she had paid between €15,000 and €20,000 into the trade union Impact's coffers over 37 years. Today, the union expects her to live on €13,000 a year. Last week, it was payback time. Angela and Co wanted the unions to fight their corner.

They were spurned.

The deferred pensioners have a cast-iron case. They fully understand the need for sacrifices, but they have one overwhelmingly justifiable gripe: they have been given a far worse deal than the so-called "active" DAA and Aer Lingus employees.

The cuts they are being forced to take make the pension deal awarded to the current "active" staff members look like the road to riches.

Both airline companies' pension funds are in tatters. As part of the final solution to the fund fiasco, compensation is being paid by both into their respective pension pots: but the sums will not be enough for any of the funds to meet former commitments. Nor is the distribution remotely fair.

In Aer Lingus' case, five times more compensation is being given to the "actives" than to the "deferred". DAA "actives" are receiving about twice as much as its "deferred".

Worse is to come. Deferred pensioners have been fleeced elsewhere. Other promised benefits including "revaluation" - the agreement to give them a small increase each year, until they reach official retirement age - has been scrapped at the stroke of a pen.

Another has been removed: they are no longer eligible for the seductive "uncoordination" - a promise of the State pension given in the original package. Not to mention the across- the-board, but uncontested, cut of around 20pc because of the woeful state of the pension fund.

The triple whammy means that many of the "deferred" are being forced to take cuts as high as 60pc in their pensions.

They are literally destitute.

How could this happen? Why should such a small group of workers be abandoned by its employers, feel betrayed by the pension trustee and sold out by their trade unions?

The reason is as simple as it is sick. Deferred pensioners are a helpless band of tragic figures. Unlike the "actives", they no longer have any labour to withdraw. They are powerless. So the Government can confine them to the rubbish heap.

Unlike the "actives", they no longer pay the punitive dues to their trade unions. So the bearded brethren can ignore them. Most of them are too old to find another job in Ireland's increasingly ageist society.

So much for protecting the weak.

The Government has refused to rescue them. Instead, Minister for Transport Paschal Donohoe offers buckets of sympathy.

They should think again. Aer Lingus and the DAA are not the only semi-states to have trapped innocent employees into accepting a package that is not worth the paper it is written on. In the semi-state shadows lurk deferred pensioners of the ESB and Bord na Mona - increasingly concerned that they will be next for bullying. They should seek assurances from their trade unions - now - that they will be defended when the pension fund trustee comes calling.

No wonder both Impact and Siptu are haemorrhaging members. Impact lost a thousand in 2013, while Siptu shed 4,000.

Perhaps the "deferred" pensioners should send an agitator to the trade unions' AGMs? They could ask Impact about how its own staff's wages went up while its membership fell, why they had a special ex-gratia pension fund for former employees, what its chief executive is paid and why it was making such generous provisions for "legal assistance to its members".

The airport unions seem stunningly generous to their own staff (ironically, when it comes to pensions) but utterly detached from those who funded their outfit for so long.

Similar questions could be asked of Siptu, not just about the increases in their salaries, but also about how crusty old socialists like Jack O'Connor and Patricia King selected J&E Davy (the bluest-blooded capitalists in Ireland) to manage the union's investment portfolios.

It would be fascinating to know what Siptu means by its "other investments" - and even more intriguing to discover what are the 27pc of items in Impact's portfolio listed as "alternative".

God help us, let us hope the successors of Stalin and Connolly are not dabbling in hedge funds?

Nothing should surprise us. The deferred pensions debacle has exposed Ireland's trade unions as deeply cynical, competing only with the Government and employers for being fairest-weather friends of pensioners in deep distress.

An obvious solution beckons. The Government is on the point of landing the Aer Lingus deal. The sale will produce a windfall of around €300m. According to the Government themselves, they do not need the money.

Good, the deferred pensioners who kept the airport open and the airline in the sky for so long now need it desperately. Nothing could be more appropriate than that a small part of the proceeds of the airline's sale should bring the compensation of the "deferred" pensioners up to the same level as the "actives".

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