Aer Lingus rubbishes €200m pension claims
The airline appears determined not to set aside any more than €100m as part of its attempts to bolster the Irish Airlines Superannuation Scheme (IASS) which is €748m in the red.
That money will only be made available with strict provisos including up to €54m in savings in return to be achieved through staff cost rationalisation.
It said as it stands, existing workers will only receive 4% of their pension because retired members, by law, must be covered first.
Therefore at the Labour Relations Commission (LRC), it proposed:
* The IASS be wound up and trustees invest in bonds “whose cash flows broadly match” IASS obligations.
* Aer Lingus would set up a defined contribution (DC) scheme in which, as long as enough staff signed up, “the overall increase in employment costs attributable to the new scheme would not be significant”.
* Aer Lingus would put in place arrangements to “improve the likely future pensions of affected IASS members”.
However, it said it would be seeking “employment cost stability” — ie, further cost savings from staff.
The estimated €100m the airline is believed to be willing to set aside includes €40m which would be used to bolster, at a later date, any shortfall existing workers suffer through the ending of IASS and the investment in bonds. A further €20m which would be used to cover revaluation for future cost of living increases.
The final €40m is in dispute. It relates to the way pensions would be calculated under the revised schemes taking statutory entitlements into account. The DAA is understood to have offered €33m.
