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AER LINGUS HAS said that if the €748 million deficit in its pension scheme is not addressed, employees could receive just 4 per cent of their expected pension benefits.
In a statement yesterday, the airline said it was attempting to assist in the achievement of a fair outcome that improves the pension prospects of members of the Irish Airlines Superannuation Scheme (IASS) in a way that balances the interests of all parties.
On 29 September SIPTU withdrew its planned industrial action following talks with the strike action committees of Aer Lingus and the Dublin Airport Authority (DAA).
However on Friday the union wrote to the Labour Relations Committee (LRC) seeking its assistance to obtain an improvement in the money offered by the two companies.
Aer Lingus said it has put forward proposals as part of the LRC process seeking to improve the pensions that can be paid by the scheme and “place future pension provision on a sustainable basis.”
It proposed closing the scheme to new members and ceasing benefit accumulation for for current members as well as reducing risk by “investing in bonds whose cash flows broadly match the IASS obligations”. This approach, it said, would result in higher pensions than the wind up of the scheme.
Aer Lingus said that if the scheme had been wound up on 31 may 2012, “current employees and their beneficiaries not in receipt of a pension would have received approximately 4 per cent of their expected IASS pension benefit”.
However the company stressed it would make no financial contribution to the scheme beyond its regular contributions which would be discontinued in any event if the IASS closed.
The airline also said it was prepared to put in place arrangements to improve the likely future pensions of affected IASS members “provided the balance between costs and benefits is in the interest of all parties including shareholders”.
Aer Lingus said there can be no certainty that an agreement will be reached between all parties involved due to the “complex” discussions at the LRC.
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Presumably we are now seeing some of the fall out from the banks share price collapse. Pension funds are decimated. I had one with the AIB that’s now worth 10% of what I put into it. I can’t go on strike though. :(
William Grogan
No you can not go on strike and your situation makes it all the more galling that the government are handing money out to unsecured bond holders hand over fist yet ignore your plight and the plight of the thousands of other people who find themselves in a similar situation. Maybe ,when the workers of Aer Lingus stand together and fight for justice in a situation they did not cause ,then too you might get a fair hearing. People MUST stand together and hold a hard line or be swept out of the way . I hope you get a just return eventually.
When you joined Aer Lingus it was a condition of your employment that you join and contribute to the scheme you were given no choice .
In many cases, pension funds are the unsecured bondholders.
Well said Paddy. A lot of S*ite talked by people on subjects they know absoloutely nothing about. The old Irish Malaise I know F-all but have an opinion on everything
William I invested sum of money with AIB and lost approximately 40% over five years and this was during the Tiger era it was the first time I lost out through a bank anywhere in Europe.Sorry you lost your hard earned cash but AIB are useless in managing investments.
Ghandi, they weren’t useless in taking their cut every year.
The problem with a defined benefit scheme is that ultimately it is a pyramid scheme. First out win, later entrants lose unless the government keeps footing the bill. We all know that ultimately private sector workers pay for much of civil servant pensions.
It hasn’t even been agreed between the parties involved whether this is a defined benefit or a defined contribution scheme. Basically, Aer Lingus and DAA staff need to wake up to the reality that their pensions are no different from their colleagues in the private sector and stop holding the rest of the country to ransom over this issue.
Eileen
You have made a clear accusation against the Management and Administrators of the Pension funds held in Trust for DAA and Aer Lingus employees by suggesting that ….something dirty is afoot here …and you go on to question as to whether the shortfall is due to Company contributions not being made which would be a breach both of Competition and Criminal law.
The best you can manage is to attack me on the basis of what you believe to be my personal financial position of which you know nothing.
Given the outrageous slur on the character and integrity of Pension Fund Trustees I would say that you may have a personal difficulty. On the subject of the implied failure for the Companies to make contributions you will also have a little problem of a legal nature.
As for me I’m just so well used to your battiness I just shrug it off.
Paddy
I am quite comfortable through my own hard work , but I do not ignore or sneer at people ‘s hard luck.
Go on away now Paddy like a good lad and thank your own blessings.
There is something dirty afoot here ! Where is all the money gone that has been paid into the pension schemes ?The share holders get first cut and then the rest will be divided up as appropriate , in other words the workers will get last call on any left overs ….. ”provided the balance between costs and benefits is in the interest of all parties including shareholders”. It is not good enough that an employee who is working and contributing to their own pension only ends up with 4%… Something is rotten
Paddy (Mark) Rodgers
Please do not address me . I have no interest in anything you have to say as you continue to insult me and as proof the journal have removed many of your rude and insulting comments addressed specifically to me.
I am entitled to offer my OPINION as much as you or any one else ,and all I am doing is giving my opinion. You on the other hand seem to think you know every thing about every thing .
So Paddy I take it you have a comfortable pension and are secure for your old age and do not have the worry of doing without even tho deductions have been made for your future security …… This situation in Aer Lingus or ANY company is just NOT Right and yet again it is the ordinary decent hard working person is made to suffer and carry the cost ….
On an up side at least you have learned how to correctly reply to posts :)
What is missing here is confirmation that all agreed contributions to be made by the Airline were ,in fact, paid. Is this a case of poor performance of investments or non investment? Can Journal clarify? This is shocking for employees . The Public would need to be informed also.
Eileen , I donot believe you have an iota of a idea of what you are writing about. If workers are in a position brought about by non-investment by the airline , of course they can strike. You should wait until the full facts are known before pontificating. These employees are down on their uppers. Do not presume to give that type of advice. If it is a question of bad investments , then the question as to whether it was reckless or not, arises. It seems you are prejudging a lot. Correct me if I am wrong.
It’s muppets like you Steven,who have caused my wages to be slashed by a third.I think your comment is lame and limp,not all public workers benefit from a high salary,yet we were the first to feel the wrath of the levy trend.
So the levy was imposed on public sector workers only – fine – but you’re ignoring the fact that in many private sector companies people were subjected to pay freezes, no bonuses or, even in some cases, pay cuts and redundancies. I don’t want to make this into an argument about public sector vs private sector but I would’ve thought that our automatic sense of entitlement died when the Celtic Tiger was put down?
It’s up to private sector workers to protest and strike like anyone else. Don’t divide, unite with public sector workers.
So Una, you mean like they do in Greece?
Assuming you were responding to me…that’s ‘Stephen’ with a ‘ph’.
The upper echelons must have their bonuses,cars,free holidays,and also not forgetting,they need to give(presents)to other members of upper management.
The Unions see the likelihood of both the DAA and the remaining shares owned by the State being disposed of and are after the cash reserves of Aer Lingus to prop up the Pension Fund which has performed in the same abysmal way that all such funds have in the past six or seven years.
The real joke is that many of these Funds are actually Bondholders that idiots want to see burned every living day on this site.
SIPTU must not be allowed to thieve from these reserves which must be used to purchase new aircraft without which there will be no airline and no jobs and no return for any investors.
paddy get your facts right. people read and believe what they want. be objective . siptu cant be blamed for all the ills in airports etc…
Get rid of the pension their is no way that them companies are going to pay into it.the unions again trying to close companies they still think aer lingus is afraid of the unions if aer lingus looses money it closes
It appears that some people are still under the impression that Are Lingus is still a State owned company. It is not. It is not in receipt of State aid and has not been for many years. Many employees of Aer Lingus ( a private company) have seen a major decrease in income along with pay freezes and changes in working conditions. Yes there is a major issue with the pension scheme which has to be addressed. Speculation on the matter without knowledge is by no means constructive or helpful. The DAA, Aer Lingus and the previous SR Technic staff had no choice but to contribute to the IASS (pension). They now face the prospect that years of mandatory deductions, which they paid into a scheme in which they had no control, will be all but lost to them.
Regardless of the attitude one may have towards the Government or the public service, the hardship that will be placed on members of this pension scheme is not a matter to be taken lightly.
Finally this is but one pension of many that face serious trouble. How this issue is resolved may have an affect on the outcome of many more pension schemes and thousands upon thousands of contributors.
Shun pensions. Better use of any spare cash would be to install better insulation from anything you can find and solar water heating systems in your home if you can stretch to it Lament not too long for your forced losses and remember always that your forefathers got by socially and economically with lots less and none of this controlling shite impositions called pensions.
The Unions are on the board of these companies and are responsible for their demise.
Frank
The demise of these Companies has nothing whatever to do with the collapse of valuations in respect of their common employee pension fund.
The combined contributions to these funds by employers and employees were invested under the control of the Trustees who act on the advice of Pension advisors Independent of the Company.
Many private sector pension funds are in trouble and employers cannot be expected to bankrupt themselves in correcting these positions.
Go get an overdraft from AIB !!!!
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