Friday 19 January 2018

Pension overhaul at Aer Lingus could avert strike

Charlie Weston Personal Finance Editor

A LEADING union at Aer Lingus has welcomed recommendations from the Labour Court, which have the potential to resolve a long-running dispute over pensions.

Passengers will be spared the pain of strike action if the complicated issue is sorted out.

Aer Lingus was hit with a number of threats of work stoppages and work-to-rules last year as unions tried to apply pressure to have the pensions dispute resolved.

Last night, Impact's Bernard Harbour said new interim recommendations from the Labour Court were positive and could see the bitter row resolved within months.

The Labour Court recommended the pension scheme be radically overhauled, with protections to ensure lower-paid workers do not lose out.

Workers at Aer Lingus are members of a defined benefit scheme that also includes workers from the Dublin Airport Authority (DAA). The plan is called the Irish Aviation Superannuation Scheme (IASS).

Defined benefit schemes in the private sector promise to pay out two-thirds of final salary for those with 40 years' service.

But the IASS had a deficit of €748m at the end of May, according to Aer Lingus.


Aer Lingus wants to freeze pay at the airline for four years in return for a one-off payment into the scheme. It also wants to freeze contributions.

At the moment, workers who retire before 65 get the pension benefits they have built up, in addition to state pensions.

The Labour Court has recommended a complicated formula, which will see lower-paid workers get a boost to their pensions, even though a new defined contribution scheme will now be put in place.

The referral to the Labour Court came after an agreement between IBEC and ICTU aimed at resolving a long-standing dispute over pension arrangements for Aer Lingus staff. The court said that if final agreement was not reached on January 31, outstanding matters may be referred back to the court.

Mr Harbour said the new recommendations had the potential to resolve the dispute, but there were still a number of issues to be resolved by a group of technical advisers who represent workers and Aer Lingus in a talks process.

He welcomed the fact that the Labour Court was putting safeguards in place to protect lower-paid workers.

A spokesman for Aer Lingus had no comment last night, but any breakthrough will have to be approved by the airline's shareholders.

The largest shareholder is Ryanair, which is unlikely to approve any deal it sees as a sell-out to workers, with the State the second largest shareholder.

Irish Independent

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