THE IRISH Aviation Authority has a deficit in its pension fund of more than €200 million, chief executive Eamonn Brennan has said.

It is currently in talks at the Labour Relations Commission (LRC) with its 700 staff on introducing a series of measures to return the fund to the black. This would involve the workers making contributions to their defined benefit pension scheme for the first time.

In its annual report, the authority said an actuarial valuation carried out by consultants Mercer had disclosed a pension deficit of €234 million on January 1st, 2009.

“Realistically I think it’s still over €200 million,” Mr Brennan said yesterday.

At present, the authority pays a contribution of 30.5 per cent into the pension fund for each staff member.

“We’re trying to secure three changes that will bring the scheme back into the black in the space of five to seven years,” Mr Brennan explained. This will involve a staff contribution averaging 8 per cent. “That’s exactly the same as they have in the public sector,” he said.

The authority also wants to extend the retirement age by one year and base future pay increases for pensioners either to the rise in the consumer price index or 3 per cent, whichever is the lower.

“We are currently in a process at the LRC with the unions and a conclusion is expected on that by June 30th,” Mr Brennan explained.

“I’m very optimistic we’ll get it resolved. There’s a good sense of engagement now.”

Impact’s assistant general secretary Michael Landers confirmed that negotiations are under way but declined to comment on the union’s proposals. “We have made our views clear to the company,” he said.

Staff, who work in air traffic control and safety functions, have already agreed to a pay freeze until 2011.

Mr Brennan said the volcanic ash crisis last month cost the IAA €4 million in lost revenue. All aircraft using Irish air space pay a fee to the authority.

“It’s a hit but we can’t take any risks with air safety,” he said. He estimated that yesterday’s six-hour shutdown of Irish airports cost the authority about €200,000.

Mr Brennan said the authority deferred €40 million worth of capital spending in 2009 and 2010 due to the recession.

“This was air traffic systems and landing aids that are not essential for a number of years,” he said. “Anything that was safety critical has gone ahead; anything that could be deferred out has been postponed.”

Mr Brennan said terminal traffic at Dublin, Cork and Shannon airports had declined by almost 30 per cent in the past two years. “It’s down a further 10 per cent this year, excluding volcanic ash,” he added.

The authority’s annual report shows that turnover declined by 3.3 per cent to €161.1 million in 2009. Profit after tax fell by 67.3 per cent to €4 million. Mr Brennan’s total remuneration declined by 24 per cent in 2009 to €324,000.