DAA sets deadline for lump sum pension payments

Dublin Airport Authority has given more than 1,000 of its staff until March 15 to accept a lump sum payment after their defined benefit scheme was frozen at the end of last year.

Along with workers at Aer Lingus and formerly at SR Technics, the affected staff were members of the Irish Airlines Superannuation Scheme (IASS) which, at one point, was more than €700m in deficit.

Following exhaustive negotiations between the companies and their staff unions, an expert panel came up with a formula for closing off the scheme and moving staff onto a new scheme.

Both Aer Lingus and Dublin Airport Authority agreed to make lump sum payments towards members of the scheme who were then to be transferred onto a defined contribution scheme. DAA set €72m aside for the lump sums for its current and deferred (those who left the company before retirement) members of IASS.

Informed sources pointed out that the proposal had been approved by the Pensions Authority and was seen as the best and most equitable solution.

Aer Lingus voted to accept the lump sum and transfer, but members of Siptu, the largest union at DAA, voted by more than 90% to reject it.

Just before Christmas management at DAA warned in the absence of a collective agreement, it would allow people to sign up individually to receive the lump sum payments.

In a document sent to IASS members by the DAA, the company says: “The offer of the DC lump sum payment expires on March 15. If you do not complete and return the waiver form by this date the offer to you will expire as you will be deemed to have declined this offer and you will not be eligible to apply again for the DC lump sum payment and you will not be eligible for the higher DC plan contributions from DAA.”

A DAA spokesman said: “In line with the expert panel’s recommendations, DAA is investing up to €72m for employee and deferred members of the IASS scheme. In that context, it has written to both active and deferred members of the scheme explaining the process for availing of lump sum payments, which DAA is making in mitigation of the pension reductions imposed by the IASS trustee.”

It is believed the company do not view the decision to set a deadline for acceptance as putting a gun to the head of workers, but rather about allowing it to ascertain how much of the €72m it needs to pay out.

According to Industrial Relations News, Siptu has told its members the March 15 date has been “unilaterally imposed” by the company.

“Once again, we are strongly advising you not to sign these waivers until such time as we have a collective agreement in relation to pensions,” the union said.