Aer Lingus in talks over pension fund, discusses possible freezing of scheme
IRELAND - Irish airline Aer Lingus is in brokered talks about the funding shortfall in the Irish Airlines Superannuation Scheme (IASS), discussing the possible freezing of the scheme.
Held under the auspices of the Labour Relations Commission, the discussions are with parties including trade unions representing Aer Lingus members of the IASS, Dublin Airport Authority (DAA) and union representatives of DAA staff, the company said.
In a statement, Aer Lingus said: "The group believes it is in the best interests of Aer Lingus, its shareholders and employees to constructively engage with the (…) parties to address the issues represented by the funding shortfall in the IASS."
But Aer Lingus said it had no obligation to increase its employer contribution to the IASS above its current fixed rate.
Current discussions, which follow on from meetings held in 2011, had two main components, it said.
Firstly, the parties were looking at options to address the funding position.
These included the possible freezing of the scheme to reduce the risk of the deficit increasing further in future, as well as possible changes to the scheme's investment strategy.
"These changes may include the purchase by the scheme of sovereign annuities or similar products to improve the expected return earned by the scheme on its investments and so reduce the deficit," the company said.
"These measures seek to preserve a higher level of pension benefit for IASS members than would be the case if the scheme were wound up, which Aer Lingus believes is inevitable in the absence of corrective action."
Aer Lingus noted that any proposals resulting from the talks could only be implemented by the trustees and with their consent.
The talks also focused on how to provide viable pensions for future service.
But the company said these discussions assumed all would agree to freeze the IASS, so no future payments would be made to it.
"Aer Lingus believes that the best interests of all parties will be served by creating separate pension schemes for DAA and Aer Lingus employees for the future," it said.
Talks were complex and at an early stage, it said. As yet, no agreements have been reached.