This link skips through to the page content, for screen readersDepartment of Transport logoAviation
2005
Steps taken to restructure the airlines pension
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22 March 2005

To ask the Minister for Transport the steps which have been taken to restructure the airlines pension to include inflation and salary related indexation; the way in which requests of retired Aviation Staff Association are being addressed by his Department; and if he will make a statement on the matter.

- Pat Breen.
For WRITTEN answer on Tuesday, 22nd March, 2005.
Ref No:   8798/05

To ask the Minister for Transport if his attention has been drawn to the pension concerns of the members of the Retired Aviation Staff Association; his views on whether the concerns raised by the group are bona fide; if he will address these concerns; if so, the proposals which are being advanced by his Department to resolve its grievances; and if he will make a statement on the matter.

- Olivia Mitchell.
For WRITTEN answer on Tuesday, 22nd March, 2005.
Ref No:   8827/05

To ask the Minister for Transport if he has recently had a meeting with the retired aviation staff association concerning the long-standing claim of Aer Lingus and Aer Rianta pensioners for restructuring of the airline's pension fund to include CPI and salary related indexation; the action he intends to take to resolve this issue; and when he expects to take action.

- Joe Higgins.
For WRITTEN answer on Tuesday, 22nd March, 2005.
Ref No:   8971/05

To ask the Minister for Transport the measures he is undertaking to meet the Aer Lingus and the Aer Rianta pensioners claim for restructuring of the airlines pension fund to include the consumer price index and salary related indexation.

- Dan Boyle.
For WRITTEN answer on Tuesday, 22nd March, 2005.
Ref No:   9075/05

Answered by Minister for Transport (Martin Cullen)

REPLY

I propose to take question Nos. 325 , 327 , 336 , and 341 together.

I am aware of the views of the Retired Aviation Staff Association (RASA) in relation to the Aer Lingus and the Dublin Airport Authority (DAA, formerly Aer Rianta), pension scheme for general employees.  These pensioners are seeking enhanced benefits under the scheme, i.e, guaranteed CPI and salary indexation.

However, at the outset, I must point out that pension entitlements for employees of commercial State bodies, including Aer Lingus and DAA, are primarily matters for the Trustees, the members of the relevant scheme and the company or companies involved.

The pension scheme in question, the Irish Airlines (General Employees) Superannuation Scheme, is a multi-employer scheme which, in addition to Aer Lingus and DAA staff, also includes a private sector company, SR Technics (formerly FLS Aerospace).   A key issue in relation to the scheme is that it cannot be amended without the consent of all participating employers and a majority of members so that no employer is in a position to negotiate exclusively with its employees as to their pension entitlements.

The rules of the Scheme do not provide for automatic pension increases in line with salary movements or CPI.  However, the practice by the Trustees under the scheme has been to provide pension increases in line with the CPI to pensions in payment. These increases are not guaranteed and are not explicitly funded but depend on the performance of the pension fund and are paid at the discretion of the Trustees of the Scheme.  

Numerous meetings have taken place between RASA representatives and the Companies and also with previous Ministers and officials from my Department and the Departments of An Taoiseach and Finance to discuss this matter.  I met with representatives of the group on 19 January last.  Despite detailed examination, there has been no obvious solution to the RASA concerns.  However, I indicated at that meeting that I would keep the matter under review with the Companies concerned.   

I should also explain that legislation has been put in place to enable both Aer Lingus and the DAA to establish new pension schemes for their own employees and pensioners.  This was provided for in the Aer Lingus Act 2004 and the Air Navigation and Transport (Amendment) Act 1998 as amended by the State Airports Act 2004.

However, it is a matter for the Companies concerned to decide if and when a new pension scheme or schemes are to be established and the terms of any such schemes would be a matter for consultation with Unions.  The normal arrangement where pension schemes of State Bodies must be approved by the Minister for Transport, following consultation with the Minister for Finance, will continue to apply.  I should point out that there is no guarantee that RASAs concerns can be addressed in any new schemes that might be established.

In the event of any new scheme or schemes being established, the Acts referred to above provide that existing pensioners who come within the scope of the scheme will be transferred to the new scheme unless they elect to remain in the existing scheme. The Acts also ensure that the benefits granted under such a new scheme or schemes shall not be less than those granted under the existing scheme.