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IPE special report May 2018

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Aer Lingus shareholders approve €150m DC pension payment

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Aer Lingus has received backing from shareholders to inject €150m into a new defined contribution (DC) fund, signalling an end to a protracted dispute over the €715m deficit in the Irish Airlines Superannuation Scheme (IASS).

The airline, which convened this week’s extraordinary general meeting to approve the recommendations of a government-backed expert panel, saw an overwhelming majority of shareholders approve the deal.

In June, the expert panel said IASS sponsors – Aer Lingus and the Dublin Airport Authority – should put aside more than €200m to address the needs of active members who would suffer benefits cuts if the defined benefit fund wound up.

If the scheme were to wind up under the current priority order, which no longer grants pensions in payment absolute priority, the fund’s deficit would fall to €197m.

The airline has agreed to inject €147m into a new DC arrangement for IASS members, as it is barred from making deficit reduction payments to the fund.

In its third-quarter results, Aer Lingus noted that once shareholders had signed off on the deal, the Pensions Authority would need to approve the Section 50 benefits cuts put forward in the IASS funding proposal.

It is unclear if the Authority will approve the Section 50 request before the end of the year, as the airline had hoped the restructuring would be complete by 1 January 2015.

Aer Lingus could not be reached for comment.

Readers' comments (1)

  • You may be interested in the attached statement from the Retirement Aviation Staff Association Dec 10 following EGM
    COMHLACHAS IAR-FHOIREANN EITILEORACHTA
    RETIRED AVIATION STAFF ASSOCIATION
    A.L.S.A.A. COMPLEX, DUBLIN AIRPORT, IRELAND
    Ph (01) 8144977.
    Email rasadub@gmail.com
    Twitter: https://twitter.com/rasatweet
    Website: retiredaviationstaffassoc

    RASA STATEMENT
    AER LINGUS SHAREHOLDERS VOTED TO CUT PENSIONERS INCOMES BY SIX WEEKS FROM JANUARY 2015.

    Aviation pensioners, whose average age is 73 years, will see their income cut by the equivalent of six weeks per year in 1 January 2015 following an Aer Lingus AGM today.

    Institution shareholders, asset managers of pension funds, Government and shareholders voted at an EGM of Aer Lingus shareholders to cut pensioners pensions.
    The EGM meeting voted in favour of paying compensation to non pensioners, active and deferred members, to mitigate against some of their potential loss in the future.
    and no compensation to pensioners for their actual losses.

    Following a meeting of pensioners at the Airport where they heard the Retired Staff Association’s actuary outline all the risks for them in these proposals pensioners staged a protest outside the Airport Radisson Hotel where the EGM was being held.

    Aer Lingus shareholders were handed leaflets as they entered the hotel and a letter of protest was given to the Aer Lingus Chairman, Mr Colm Barrington.

    RASA has stated that the fight continues and has set up a Pension Fighting Fund and requesting donations of €100
    Issued by RASA, Dec 10 2014

    Contact details: Paddy Kilduff - 086 820 7465 - paddykilduff@ymail.com

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