Aer Lingus ‘must pay more into pension fund’

Aer Lingus has been warned it must up its contribution to the ailing pensions of its staff in order to avert the disruptive industrial action which could hit flights within a matter of weeks.

For a number of months the airline has said its offer of a once-off payment of €140m — €110m for current employees in the Irish Airline Superannuation Scheme and €30m for deferred members of the scheme — is “adequate”.

The company reiterated that position last week in a letter to staff union Siptu from its director of change, Sean Murphy.

Yesterday, the union’s pensions policy adviser Dermot O’Loughlin wrote back to Mr Murphy challenging that figure, especially if the two sides were to use a Labour Court recommendation from 2013 as a basis for a resolution of the €800m deficit in the Irish Airline Superannuation Scheme. The trustees of the ailing scheme have recommended that the court’s recommendation be implemented.

Mr O’Loughlin said the €110m for active members was insufficient for a number of reasons:

nIt was always envisaged that all members of Irish Airline Superannuation Scheme would as a minimum receive a 100% coordinated pension entitlement. Under a proposal from the trustees of the scheme, the co-ordinated benefit is to be cut by 20%.

nThe capital sum being referred to by the airline was out of the date as it was based on data from late 2012/early 2013.

In the same letter, Mr O’Loughlin also said the union was “most surprised both with the tone and content” of a letter from Mr Murphy sent to Siptu last week.

In that letter Mr Murphy said the airline would consider legal action to prevent industrial action that would cause “irreparable loss and damage to Aer Lingus”.

He also questioned how all Siptu members could take industrial action when only Irish Airline Superannuation Scheme members at the airline were balloted.

In response Mr O’Loughlin said the threat of legal action “points towards a provocative approach and only serves to heighten the suspicion amongst our members that the company are not committed to resolving this dispute through the normal industrial relations procedures”.

“It is incorrect for you to say that we have communicated that it is our intention to have industrial action involving all SIPTU members,” he wrote.

Mr O’Loughlin signed off the letter by saying Siptu “re-iterates our intention to seek an acceptable resolution to this dispute through constructive engagement”.