Ireland rules out aid for semi-state pension fund despite deficit
IRELAND - The Irish government has denied that a semi-state pension fund - previously reported to have a €500m deficit - will receive any support from the exchequer to help address the issue.
The Irish Airlines Superannuation Scheme (IASS) - a multi-employer fund for Aer Lingus, the Dublin Airport Authority (DAA) and the non-operational SR Technics - recently released to stakeholders its actuarial valuation for the year to March, with Ireland's minister for transport, tourism and sport acknowledging that a "significant deficit" was expected.
Speaking in the Dáil, deputy Leo Varadkar said payment of benefits was "primarily" a matter for trustees to address.
He added: "I understand, however, that the trustees for the IASS have advised the participating employers and membership that the preliminary results of the March 2011 actuarial valuation of the scheme indicate a significant deficit as measured using the statutory minimum funding requirement."
Under funding standard guidelines, which the government last month confirmed would be reinstated and reformed, schemes now have until 16 December to file recovery plans.
Varadkar added that he expected trustees of IASS to release proposals on how to address the deficit, working with its stakeholders to "identify solutions".
However, he ruled out any kind of state support for the fund, despite DAA being a state company.
He said that neither the exchequer nor DAA were in a position to "bail out a pension fund in significant deficit".
He instead said the country's Electricity Supply Board (ESB), which transitioned from a final salary to career-average arrangement to control a €2.2bn deficit, could "provide a template".
"It dealt with its pension deficit largely via an agreement under which employees increased their contributions, the terms of the pensions they expected to receive were changed and the company made a contribution," Varadkar.
"A solution such as this may offer a good model for the companies in question to pursue."