Any solution to pension dispute at airline bound to disappoint some

The dispute over pensions for staff in Aer Lingus, the Dublin Airport Authority and the Shannon Airport Authority has been running now for four years.

The row over the joint pension scheme (which also included the now-departed SR Technics) seems to be moving into a new phase, although it would probably be premature to forecast that an end is in sight.

The trade union Siptu now has a mandate for strikes from its members in the three companies and, although the union may serve notice of industrial action in the next day or so, there is likely to be a relatively lengthy lead-in period, meaning that any disruption would be a number of weeks away at least.

However the advance bookings of airlines could be hit in the meantime as anxious passengers worry about potential flight chaos.

More immediately the trustees of the Irish Airlines Superannuation Scheme are expected to come up with a revised funding proposal in the days ahead.

Trustees
The trustees are understood to have been in discussions with the Pensions Board, which last year called foul on a settlement deal that emerged from the Labour Court.

The companies have indicated that they are not prepared to invest any additional money over and above the level set out in the Labour Court deal.

This would have seen Aer Lingus put up around €140 million and the Dublin Airport Authority around €60 million.

There has been considerable speculation that the new funding proposal from the trustees could involve cuts to benefits of retired personnel.

Pensioners
Any such move would be controversial, to say the least, and could lead to legal action.

Legislation introduced by the Government last year allows pension schemes, which are cutting benefits, to reduce pensioner benefits by up to 10 per cent – or up to 20 per cent if the pension is more than €60,000 – provided that a minimum of €12,000 per year is untouched.

Last month the Retired Aviation Staff Association wrote to Minister for Transport Leo Varadkar seeking a meeting amid concerns that its members were going to be hit for millions as part of a new settlement proposal.

“Our members will be targeted with €110 million, equivalent to what Aer Lingus will pay for its current staff. Is this fair to members who believe they have property rights to their pension?

“In February 2012 you advised us to deal with the employers but they say we have to deal with the trustee. You are the Minister in charge, holding 25 per cent stake in Aer Lingus and 100 per cent of DAA. We believe it is time for the Government to take a stand and to work towards a solution.”

Informed sources said that if the new proposals from the trustees did involve contributions from pensions, as set out under the legislation, it could generate between €100 million and €110 million.

However some informed sources maintained that this would only marginally affect the proposed benefit cuts for other staff under any deal.

Aer Lingus and the Dublin Airport Authority, as well as the Government, have called on the trustees to set out their new proposals. However it is virtually certain that whatever emerges it will not satisfy everyone.