Aviation pensioners still battling for their say on savage cuts

Many of us are looking forward to January 1 to reap the meagre benefits of the latest budget, but there are almost 5,000 people for whom the turn of the new year will mean a significant cut in their incomes.

Unfortunately, the group in question will have very little chance to find an alternative revenue stream to make up for the reduction in their finances.

They are aviation pensioners, many of whom spent the majority of their working lives in the industry during which time they saved for their retirement pension through the Irish Aviation Superannuation Scheme (IASS).

Now with an average age of 73, they say they are to see their income cut by the equivalent of six weeks’ wages as of January 1.

The pensioners — former employees of Aer Lingus, Dublin Airport Authority, and aviation company SR Technics — had no active role in the negotiations which led to the cuts in their pensions. They, like the deferred members of the scheme — those who worked for the aviation companies but then moved into other jobs but are not yet retired — were excluded from the prolonged talks which occurred over four years through various sessions of the Labour Court and the Labour Relations Commission.

It is a scenario which is likely to become more prevalent given the number of defined benefit pension schemes that have had to submit recovery plans to the Pensions Authority over the last 12 months. Yet, despite being the most acutely impacted members of such schemes, existing pensioners are currently prevented from accessing the third-party machinery of the State because they are no longer regarded as “workers”.

It is not just pensioners in the private sector that are affected by the restriction. Last year, the Alliance of Retired Public Servants was set up in response to what it described as “the continued failure” by the Government to engage with groups representing retired state employees during negotiations of Croke Park II and subsequent Haddington Road Agreement.

That is in spite of the fact that 33,000 pensioners were represented by those groups and that cuts of between 8% and 28% were to be made from all public service pensions over €12,000 per annum.

Following the establishment of the alliance, it was at least able to secure a meeting with Public Expenditure Minister Brendan Howlin who, it claimed, welcomed a “formal structure such as the alliance for ongoing engagement on pension matters”.

In the case of the 5,000 retired members of IASS, it seems too late for any such engagement. They are set to see their pensions cut by 10% for those over €12,000 and by 20% for pensions over €54,000.

There can be no argument that something needed to be done to address the €700m-plus hole in the IASS scheme. But pensioners question the burden they have to bear.

The Retired Aviation Staff Association which represents them said: “The monies that are talked about are the amount of compensation funds negotiated by employers with trade unions which are going in some way towards mitigating against the potential losses in respect of deferred and active members.

“There is no such mitigation for pensioners who are in their 70s, 80s, 90s-plus. Pensioners have had no voice, no vote, deliberately excluded by the employer/trustee, and not involved in any communication roadshows . However, they are being hit with a reduction in the capitalised value of their pension benefit of €175m.”

It said the pension they subscribed to was for life and paid for during employment “on a formula agreed between the employers and the actuary, and approved by governments of the day, for agreed pension amounts”.

In recent days, Jobs Minister Richard Bruton was asked by Independent TD Catherine Murphy about bringing forward legislation to provide for the right of former employees and pension beneficiaries to be represented and negotiate on their own behalf within the industrial relations architecture of the State.

In response, Mr Bruton said he “fully appreciates the concerns of retired and deferred members of pension schemes whose schemes are being restructured, particularly where such restructuring may impact on existing or potential pension benefits”.

He said the trustees of a particular pension scheme were already required by law to act in the best interests of all its members.

“On that basis, the trustees have to take account of the interests of the deferred and pensioner members in any proposals they make,” he said.

However, the jobs minister said the Labour Court had received legal advice on a number of occasions since the 1970s suggesting that a person who is retired cannot be regarded as a worker and cannot be party to a trade dispute capable of investigation by the court.

“I can say, however, that I am currently considering the introduction of access rights for individual retired workers to the industrial relations machinery of the State under the Industrial Relations Acts, where they have not referred their claim prior to their retirement.”