Pension trustees may step in to avert shutdown of main airports

Trustees of the insolvent Irish aviation workers’ pension scheme are expected to step into the row over its €780 million deficit later this week in a bid to settle the dispute, which threatens to shut the Republic’s main airports and cause widespread travel chaos this month.

Members of trade union Siptu at Dublin and Cork airports voted overwhelmingly yesterday to strike, while those at Shannon Airport and Aer Lingus are expected to deliver a similar result today.

Union representative Dermot O'Loughlin blamed the workers' vote on the "intransigence" of employers, trustees and regulators in failing to tackle the hole in their retirement fund, the Irish Airlines Superannuation Scheme (IASS), which has a €780 million shortfall .

Industrial action could begin at the end of this month. A strike would shut the airports, grounding flights to and from all three, as Siptu represents the majority of their staff, including those involved in providing vital services such as fire crews and security. However, sources suggested yesterday the pension scheme's trustees, led by chairman Brian Duncan, may intervene and publish a new proposal to plug the fund's €780 million deficit this week, raising hope industrial action can be averted.

DAA
The trustees did not comment but Dublin Airport Authority, the State company responsible for Dublin and Cork airports, said it believes they will be in a position to make their proposals very soon. DAA stressed it is willing to meet union representatives to seek the best way forward. "In light of this commitment, DAA calls on the trustees to announce their final proposal and on Siptu not to contemplate any form of industrial action," it said, adding a strike would not hasten resolution.

Aer Lingus, DAA and departed aircraft maintenance specialist SR Technics jointly operate the IASS, whose benefits are tied to retirees' salaries at the time of leaving employment. Any deal to tackle the fund's deficit is likely to involve a proposal to cut the pensions current employees – and those who have left the companies but not retired – will draw from the scheme on pensionable age. Legislation passed late last year means it is open to the trustees to reduce payments to those who have retired and are drawing a pension from the fund.

Implementing law
If those responsible for overseeing the scheme took this route, they would be the first to apply the new law, which was introduced to help ease the growing pressure on defined-benefit schemes such as the IASS. The pensioners affected could vote on such a proposal.

Workers at both DAA and Aer Lingus have threatened to strike a number of times over the last three years as the row over the €780 million hole in their pension pot intensified, but industrial action has always been avoided to date.

The last time the dispute threatened to bring the three airports to a standstill, in late 2012, the issue went to the Labour Court, which published a series of recommendations last May that included calling on the DAA and Aer Lingus to pay €160 million between them into a new defined-contribution fund. That proposal subsequently fell foul of the Pensions Board, which regulates Irish pension schemes.

DAA said yesterday it believes a resolution can still be achieved on the basis of those recommendations, while Aer Lingus chief executive Christophe Mueller has said several times the airline believes they are the best basis for a settlement of the dispute.