Business Irish

Thursday 16 August 2018

Row erupts over Aer Lingus pension pot

 

'Staff will receive on average €40,000 each from the special supplementary pension.' Photo: Bloomberg
'Staff will receive on average €40,000 each from the special supplementary pension.' Photo: Bloomberg

Fearghal O'Connor

A major row has broken out at Dublin Airport over a special pot of pension money that is being shared out among Aer Lingus workers.

About 2,300 staff will receive their share of a €100m-plus pension pot, known as Pot B, which is now being wound up.

Staff will receive on average €40,000 each from the special supplementary pension. It was established eight years ago with a €34m Exchequer payment to compensate workers for the Aer Lingus flotation and to prop up its then ailing defined benefit pension fund.

Pot B's investment performance has been strong - up €14m in 2015 alone - leaving members with a big return on their 2pc of salary contributions over the last eight years, further boosted by a 4pc contribution from Aer Lingus. Each worker's total share is now to be transferred into their new defined-contribution schemes.

But huge discrepancies have emerged in what each member will actually receive after trustee Irish Pensions Trust wrote to members last week detailing amounts. This newspaper has seen numerous examples of letters to individuals that show huge differences - even between individuals with very similar age and service profiles.

For example, one worker who contributed more than €10,000 will receive just over €12,000, an 18pc rise.

But a colleague who contributed just under €23,000 is to receive €84,000, a whopping 267pc return.

Another pot member with a very similar profile, who also contributed just under €23,000 over eight years, will get €20,000 less.

Letters to two other members, also with similar profiles, also show major discrepancies.

One will receive €3,000 on top of their €14,000 contribution but another will receive €10,000 on top of €15,000 in contributions.

Siptu sector organiser Neil McGowan wrote to the trustee last week about "potential discrepancies" and "widely varying transfer values" and demanded a meeting with the trustees.

Sunday Indo Business

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