Air worker pensions €600m in deficit

TALKS are to begin next week on ways to address the rapidly escalating deficit in the pension scheme for the Dublin Airport Authority and Aer Lingus workers, now reportedly in the red by up to €600 million.

The Labour Relations Commission (LRC) is set to call employers and union representatives into discussions on the scheme on Friday and, according to correspondence seen by Industrial Relations News, LRC chief Kieran Mulvey has told both sides the talks will address a number of issues, including:

nWhether the pension scheme, the Irish Airlines Superannuation Scheme (IASS), which covers workers and former workers in Aer Lingus, DAA and SR Technics, can be continued either as a joint employer or single employer scheme and what the implications would be for employers and pensioners if it was terminated;

* If the Irish Airlines Superannuation Scheme is to be “frozen”, what arrangements are possible to preserve current and deferred benefits of members in the DAA, Aer Lingus and SR Technics;

* What the contribution/funding arrangements and benefits for current active members would be in any schemes that may emerge;

* Apportionment of liabilities/assets of IASS between the DAA/Aer Lingus/SR Technics.

It is likely a scheme will have to be established to cover future workers in the companies.

Mr Mulvey has said the talks process will have to see engagement between the two companies and their unions to address their workplace-specific issues. Once that process is complete, an “overarching” meeting could then proceed to find an overall solution.

“In order to ensure that the above process comes to an effective and workable solution and in order to table proposals for existing and future pension arrangements for all concerned, the parties will have to have set out for the Commission their clearly enunciated positions,” Mr Mulvey said in the correspondence.

“Otherwise we would be engaged in a fruitless end of meetings with no solution emerging.”

The problems facing the pension scheme have mounted rapidly in the last year. In March 2010, the deficit was €302m. A year later it had risen to €343m.

A presentation by Mercer, the actuaries to the scheme, on August 26, gave a further update on the size of the deficit as of July 31 which was €501m. It has since continued to escalate.