Friday, October 12 14:58:26
Efforts to resolve the dispute over the E748 million deficit in the Aer Lingus and Dublin Airport Authority (DAA) pension scheme ended in disarray last night at the Labour Relations Commission (LRC).
SIPTU called off a threatened strike at Aer Lingus and the Dublin Airport Authority earlier this month as the LRC intervened.
The union said today that the breakdown in the discussions occurred when Aer Lingus representatives refused to meet directly with unions representing the staff pension committees.
The company is also refusing to attend the Labour Court in relation to the issue.
According to SIPTU Organiser, Dermot O'Loughlin, workers at the two companies are 'angry and disillusioned' with the discourteous behaviour which the Aer Lingus management team has displayed. "Local representatives sought the opportunity to meet with the management side to tease out the specifics of the company's proposal. The company refused to meet and only provided a three-quarter page note entitled 'Proposal Summary' which was bereft of detail.
"It is the view of the pension committee that Aer Lingus has chosen to deliberately abandon all meaningful and reasonable negotiations to resolve the pension crisis. Our members are angry and disillusioned at the discourteous behaviour of the Aer Lingus management team," he said.
In an announcement to the stock exchange on Monday, Aer Lingus outlined its proposals to address the deficit.
It proposed freezing the current IASS scheme - and reducing risk by investing in bonds whose cash flows "broadly match" the IASS obligations. It claimed this approach would deliver higher pensions than on a wind-up of the IASS, but would be at the sole discretion of the scheme's Trustees.
It said that if the scheme had been wound up on May 31, the current employees and former employees who have not yet retired would only have received 4pc of their expected IASS benefits due to the deficit. That outcome, it said, would be extremely damaging for the group, its employees and shareholders.
However, Aer Lingus stressed that it would make no financial contribution to the IASS beyond its regular contributions - which would cease in any event when the IASS was closed to future contributions.
Once the IASS was frozen, Aer Lingus would establish a new Defined Contribution scheme on what it called "competitive terms" to cover future service by employees. It said the overall increase in employment costs attributable to the new scheme is "not expected to be significant".
The statement also noted that Aer Lingus is prepared to put in place arrangements to improve the likely future pensions of affected IASS members - provided the balance between costs and benefits is in the interests of all parties - including shareholders.
Those arrangements would include a once off initial contribution to "kickstart" the defined contribution scheme. While it is not specified in the statement, it is understood that the current proposal would see Aer Lingus contribute E1,000 per year of service per employee, with the structure of payments favouring those closest to retirement.