AIB to close staff pension scheme bailed out by taxpayer just last year
AIB is set to close a staff pension scheme that was controversially bailed out with taxpayer assets last year.
Staff at the bank are also likely to lose their automatic pay increments following a Labour Court ruling on pay and pensions at the nationalised lender.
In a ruling published on Monday, the Labour Court and Labour Relations Commission mediator Kevin Duffy recommended closing AIB's defined benefit scheme and replacing it with a defined contribution scheme by the end of the year.
It is the same scheme that the bank controversially "bailed out" last year by transferring in loan assets with a face value of €1bn. The market value of the loans is thought to have been well below the face value but the move sparked outrage after AIB chief executive David Duffy said it would benefit retired executives who were in senior roles when the bank's lending to homeowners and property developers reached unsustainable levels.
As well as tackling the pension issue, the Labour Court ruled that staff who are currently working less than 36 hours a week should have their hours increased from the start of next April, while the deadline for the bank's voluntary redundancy scheme should be extended by a month to the end of February 2015.
Workers below manager grade will get a one-off lump sum worth 4pc of their salary under the plan. That lump sum, however, will signal the end of automatic increments for bank staff.
The recommendations come after several months of negotiations between the bank and main bank workers' union, the IBOA.
AIB had originally wanted to close the defined benefit scheme a year ago.
IBOA boss Larry Broderick said the union would take time to assess the recommendations and would ballot its members. A vote is likely to take place before the end of this month.