IBOA members reject AIB pension plans
IRELAND - Negotiations between AIB Group and the Irish Banking Officials Association (IBOA) are being referred to the Labour Relations Commission (LRC) after members voted to reject the bank's proposals on pay and pensions.
AIB has proposed changes to the defined benefit (DB) scheme to help address the €1bn deficit including a new member contribution of 5% and changes to the calculation of final salary. (See earlier IPE article: AIB faces further talks over €1bn deficit)
IBOA balloted members earlier this month, urging them to reject the bank's position on employee remuneration as "unacceptable and opportunistic", and yesterday revealed employees had "voted overwhelmingly to reject the bank's proposals on pay, pensions, job security and other contractual issues".
IBOA confirmed it would be referring the issues to an agreed third-party for mediation and has made contact with the LRC, the Advisory, Conciliation and Arbitration Service (ACAS) in the UK and the Labour Relations Agency in Northern Ireland as members in all three countries are affected by the proposed changes.
Larry Broderick, general secretary of IBOA, said: "The outcome of the ballot reflects the deep sense of upset and anger among staff at the Bank's opportunistic proposals." He also confirmed the union had contacted AIB to request it reconsider its position and engage in constructive discussions with IBOA on all matters.
Following a meeting of the IBOA AIB Executive Committee, the union also warned if the bank fails to "honour its legal requirements under pay and pensions, IBOA will consider the processing of legal cases to the various courts in the three jurisdictions", although it confirmed any further decisions will depend on the outcome of the negotiations.
In the meantime it has asked all members that hold shares in the group to keep their voting forms for the Annual General Meeting (AGM) on 13 May 2009.
The organisation told members "it may become necessary that your proxy votes be assigned to the IBOA" and admitted the union "might have no option but to attend the AGM and highlight the general dissatisfaction and concerns among staff unless the bank engages constructively with us on your behalf on the outstanding issues".
The suggestion of shareholder action comes as AIB confirmed it intends to raised a further €1.5bn of financing after stress tests carried out as part of a due diligence process by the National Pension Reserve Fund (NPRF) Commission revealed in certain extreme situations AIB's core tire 1 capital could need further strengthening.
AIB has already been earmarked to receive €3.5bn from the NPRF as part of the government's recapitalisation programme, expected to finalise in mid-May after the AGM, however following the tests both the bank and the minister of finance agreed a total amount of €5bn new tier one capital is appropriate.
So, in addition to the funds from the NPRF, AIB revealed it aims to raise the extra €1.5bn by the end of 2009, potentially through the disposal of assets, although it acknowledged any further cash injections by the government would be in the form of equity capital therefore increasing state ownership and control of the bank.
Brian Lenihan, minister of finance, said: "This move by AIB will further boost confidence and credibility in AIB's ability to weather the financial storms we have experienced and emerge in a stronger position when conditions improve."
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