The Pensions Board has started a public review of the status of Aer Lingus employees's pension schemes. Management and unions at the airline have been at odds over the schemes for nine months. The row escalated when worker directors refused to sign off on this year's accounts.
IMPACT, the union which together with SIPTU represents the bulk of workers at Aer Lingus, applied to the Pensions Board at the end of January for "a determination" on the schemes. Unions maintain the schemes were presented and described as defined benefit schemes from their inception in the 1950s until last year's annual report and were registered with the regulator, the Pensions Board, as such.
Last year, the airline's annual report amended the schemes's description to targeted benefit schemes, which are effectively defined contribution schemes, aspiring to a certain level of benefit, according to experts.
The unions claim this is a fundamental alteration in the schemes while executives at the airline insist there has been no change in their status.
Now the Pensions Board has issued public notices seeking submissions from people with an interest in the schemes - the Irish Airlines (General Employees) Superannuation Scheme and the Irish Airlines (Pilots) Superannuation Scheme. These include, employers, scheme members, pensioners and trustees.
Aer Lingus has about 4,000 staff following its recent survival plan. Those in the general employees scheme pay 6.875 per cent of their salary into the pension fund, a figure matched by the employers. The pilots fare considerably better. They pay in 7 per cent of their salary to their scheme while employers pay a sum equivalent to 21 per cent of gross salary.
Submissions in writing on the schemes, which also number staff at Aer Rianta, FLS, Airmotive and Timas as members, must be with the Pensions Board's agents, Matheson Ormsby Prentice, by April 7th. There is no indication how long it will take the board to rule on the status of the schemes.
The row may force the Government to put plans to sell the airline on hold for the second time. It had been thought that the Government would look at a sale of the company or the bringing in of a strategic investor this year. But with an unquantifiable pensions liability potentially hanging over the airline, there is little prospect of any move in the short term.
