Aer Lingus to put €140m pension proposal to shareholders
IRELAND – Aer Lingus hopes to hold a shareholder meeting later this year to gain approval for a plan to resolve the funding problems within the Irish Airlines Superannuation Scheme (IASS), according to its half-yearly results.
The Irish flag carrier said it hoped progress on a proposal by the Labour Court would be “sufficiently advanced” soon, allowing it to hold an extraordinary general meeting (EGM) later this year.
The court, used for industrial relations disputes, proposed in late May that the airline should pay €140m towards a new defined contribution (DC) fund as a compromise for not addressing the deficit within the IASS general employees scheme – which the company maintains it has no obligation to close.
In the half-yearly report, the airline notes: “Implementation of the Labour Court recommendation is dependent on a series of further steps, which Aer Lingus Limited is seeking to implement in the coming months, in conjunction with the IASS Trustees and other stakeholders.
“This includes seeking Aer Lingus shareholder approval and a requirement for the Trustees to obtain regulatory approval for the proposal.”
The report said the IASS had a deficit, as measured by Ireland’s minimum funding standard, of €769m at the end of March, a €10m decline over the previous December.
It said the multi-employer fund, which also serves employees of the Dublin and Shannon airport authorities and SR Technics, estimated 65% of the deficit was “attributable” to current or former airline workers.
Prior to approaching shareholders at the EGM for approval, the company said it would need to seek agreement with affected trade unions, other scheme sponsors and trustees.
It also added that it still believed the court proposal was viable and in the interest of all parties involved.
However, the airline stressed that the Labour Court proposals did not affect a second part of the IASS, covering the airline’s pilots.
“Aer Lingus Limited is separately engaged in a process of discussion with parties affected by the funding position in the Pilots Scheme,” it said.
The deficit within the IASS has been an ongoing concern for the company.
Its largest shareholder besides the Irish state – rival Ryanair – has in the past threatened to sue the airline if it attempted to fund its share of the IASS deficit.