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Irish roundup: IASS, High Court, Irish Stock Exchange, ISE FundHub

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Aer Lingus and the Irish state may be facing a €174m High Court case over the decision to reduce pensioner benefits paid by the Irish Airlines Superannuation Scheme (IASS).

The Retired Aviation Staff Association (RASA), representing pensioners affected by the changes to the IASS, met earlier this week and were unanimous in their support for a legal challenge, according to a statement.

The RASA said pensions in payment had been cut after the Pensions Authority accepted the funding proposal put forward by the IASS trustee board, submitted after years of negotiation over the €715m deficit.

The IASS – a multi-employer fund sponsored by the Irish flag carrier and the Dublin Airport Authority – cut benefits by an estimated €174m as part of the proposal, with the RASA alleging that the liability had been transferred to pensioners.

In its statement, the association only said that the probable High Court case would be brought “against a number of potential defendants”, which could include the sponsoring companies and the government.

Both the RASA and L K Shields, the law firm representing the IASS pensioners, declined to comment further.

Cuts to pensions in payment were made possible after the Department of Social Protection changed the priority order of assets on wind-up, which previously offered complete protection to a pensioner’s accrued rights.

The previous regime was considered inequitable by many critics, including parliamentarians, as it would necessitate deeper cuts to active and deferred members’ pensions where a scheme was in deficit on wind-up. 

In other news, the Irish Stock Exchange (ISE) has implemented a new web-based fund information portal aimed at institutional investors.

The portal, named ISE FundHub, offers detailed information on funds listed on the ISE.

It displays the current net asset values (NAVs) and NAV histories of each listed fund, as well as key fund documents, and provides profiles of investment managers.

Other functionalities are categorisation of funds, comparisons versus peers and analytics.

At the launch of the platform in November last year, 20 investment managers had agreed to use the service.

Among the fund managers already using the service are J O Hambro, Neuberger Berman and Dragon Capital.

The ISE is currently in discussions with other fund managers that already list their funds on the exchange, including Goldman Sachs and US money manager Lord Abbett.

It hopes to have 100 fund managers using the service by the end of this year.

The ISE Fund Hub was developed in partnership with FundConnect, the Danish fund infrastructure provider.

Rose Ward, vice-president for international primary markets at the ISE, said: “A consistent theme was that both investors and managers wanted more information on funds. By providing NAV histories, peer comparisons, access to key fund documents and investment manager profiles, we are addressing that requirement.”

For more on the DC reforms facing the Irish pensions industry, see the current issue of IPE magazine

Readers' comments (1)

  • This is a first!!!. Unilateral cut to pension annuity. Annuity or pension for life was set at time of draw down at 65. Paid for over 40 to 45 years. Pensioners in this DB scheme cannot access this money.

    The cuts to pensions commenced January 2015. This is in addition to the Government Pension Levy, deducted again for lifetime of pension, which also increased this month.
    There was a partial buy-out of this DB pension fund [IASS] liabilities to deferred and active members. This was done by way of individual compensatory payments by both Aer Lingus and Daa at a discounted ‘negotiated’ price requiring individual acceptance by those members.

    These payments (totalling c.€250 million) are being paid outside of the IASS. There have been no similar engagements, negotiations or agreements reached with IASS pensioners

    The reduction to Aer Lingus and related employers is estimated at c. €129m, and the daa reduction at c. €45m. The effective result of a reduction in this commitment is that this liability has now been transferred to pensioners by the employers and the IASS trustee

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