Dáil Éireann debate -
Tuesday, 28 Nov 2000

Vol. 526 No. 6

Written Answers. - Pension Schemes.

John Gormley

Question:

169 Mr. Gormley asked the Minister for Public Enterprise if she has received correspondence from a person (details supplied) in Dublin 18 in relation to the unjust treatment of Aer Lingus pensioners; and if she will make a statement on the matter. [27217/00]

Trevor Sargent

Question:

183 Mr. Sargent asked the Minister for Public Enterprise when Aer Lingus and Aer Rianta pensioners can expect their disappointingly low pensions to be linked to annual national pay increases from 1989 when parity was broken; and when a capital injection into their pension scheme of £76 million will be made to make up for the underfunding over the past 30 years. [27723/00]

Minister for Public Enterprise (Mrs. O'Rourke)

I propose to take Questions Nos. 169 and 183 together.

I received correspondence last April on behalf of the pensioner concerned and I responded promptly.

I refer the Deputies to my replies to parliamentary questions on 3 October 2000 and 19 October 2000 which give detailed information on issues relating to Aer Lingus and Aer Rianta pensions.

Having regard to the question of pension increases, I understand that the rules of the Irish airlines – general employees – superannuation scheme do not provide for pension increases in line with pay movements. However, I understand that in line with the discretion available to them under the scheme, the trustees have provided pension increases in line with the consumer price index. The benefits from the scheme are those that have been agreed by the membership of the scheme.

Aer Lingus are proposing in their new scheme that pensioners will be guaranteed increases in line with the annual consumer price index, CPI, provided that it does not exceed 5%. However, the company does not propose to provide for pension increases in line with salary movements for ongoing costs reasons and as it would also necessitate a substantial cash injection which I understand would be significantly more than £76 million as suggested by the retired staff association.

In so far as Aer Rianta is concerned, a joint Aer Rianta management/staff group, working under the partnership structures in the company, has recently completed an indepth review of the pension scheme and submitted the report to management and unions on 22 September 2000. They have also held a number of meetings with the retired staff association. Aer Rianta's intention is to establish a new scheme as soon as possible in consultation with unions, staff and other concerned interests. I expect to receive a report from the chairman of Aer Rianta concerning their proposals for a new pension scheme in due course.

Enhancements to the existing entitlements of pensioners must be linked to and in line with any improvements that emerge from negotiations between staff interests and the companies concerned regarding any new schemes. My Department will monitor these negotiations with particular regard to the concerns of retired staff in the context of the new schemes.

While fully aware of the commercial imperatives under which Aer Lingus and Aer Rianta operate and the cost implications of pension enhancements, I nevertheless hope that the agreed terms of any new schemes will enable the pensioners concerns to be addressed as much as possible.

As I indicated in my response on 3 October 2000, there is no question of any subsidy being provided by the State towards the Irish airlines – general employees – superannuation scheme or the proposed new schemes to be established by either Aer Lingus or Aer Rianta.