Union to ballot AIB staff on cuts

The IBOA is to ballot its members in AIB regarding new Labour Court recommendations, which largely support the bank’s planned widespread cost-cutting programme, before the end of this month.

The union yesterday welcomed what it called “substantial progress” made on the plans which will see changes in pay, pensions and working hours but added that, if accepted and implemented, they will represent “significant change” for many members.

“We will now consult our members on these wide-ranging and comprehensive recommendations,” IBOA general secretary, Larry Broderick said. “We will consider the recommendations in detail and await the response of AIB and the bank’s stakeholders before coming to any conclusion.”

Last year, AIB announced plans to freeze salaries, cut executive pay and slash its pension costs — a switch from a defined benefit scheme to a defined contribution plan — as part of an overall cost-cutting programme. Earlier this year, the bank said it was postponing the closure of its DB pension scheme ahead of further Labour Court talks.

The court ruled yesterday that the bank can close the DB scheme, which has a deficit of around €789m.

The new Labour Court/Labour Relations Commission recommendations include the closure of the scheme to new accruals at the end of 2013, to be replaced by a new DC scheme featuring 10%-18% employer contributions depending on members’ ages.

Other recommendations include a phased increase in working hours — starting in October and next April — an annual pay review (mirroring bank performance, current living costs and market conditions) and a once-off payment, equal to 4% of salary for all AIB’s IBOA members below manager level, “in recognition of the overall provisions of the recommendations”.

AIB yesterday confirmed it had received the recommendations and is considering them, before engaging with staff.

“AIB has been in ongoing discussions with the IBOA for an extended period of time — in respect of changes to staff pensions and pay and terms of employment — in order to reduce the bank’s overall costs and in response to the minister for finance’s request following the publication of the Mercer report earlier this year,” a spokesperson said.