Vol. 530 No. 5
77 Mr. N. Ahern asked the Minister for Public Enterprise the position and progress with regard to the claim from retired Aer Lingus and Aer Rianta staff for upgrading of their pensions; if the study of comparable pensions in the general public service has been completed; if the findings can be quoted; and if a statement can be made on the matter giving a possible timetable for the satisfactory conclusion of the whole issue. [4373/01]
As I have already indicated in replies to a number of parliamentary questions, Aer Lingus and Aer Rianta are proposing to establish new pension schemes for their serving staff and pensioners. The terms of the new pension schemes are essentially a matter for the companies concerned to negotiate with staff interests taking account of overall Government policy on public sector pensions, affordability and broader industrial relations priorities for the companies going forward. Existing Aer Lingus and Aer Rianta pensioners who transfer to the new schemes will receive the improved benefits.
Aer Lingus is proposing in its new scheme that pensioners will be guaranteed increases in line with the consumer price index provided it does not exceed 5%. Should the CPI exceed 5%, the trustees of the new scheme may, at their discretion, award further percentage increases to pensions in payment on the basis of advice from the scheme's actuary. It is also proposed that the new scheme will provide improved benefits in areas such as guaranteed pension payment periods and death-in-service benefits.
Aer Lingus advises that the overall terms of the proposed new scheme will be in line with practice in the private sector and, in many cases, will have better benefits. The company does not propose to provide for pension increases in line with salary movements for ongoing cost reasons and as it would also necessitate a substantial capital injection which it cannot afford.
In so far as Aer Rianta is concerned, the company proposes to establish a new scheme as soon as possible in consultation with staff interests. The Department of Finance compared the Irish airlines scheme with the standard public service pension scheme terms. That Department has indicated to my officials that the scheme's core benefits tended to be better than the public service norm. However, the Irish airlines scheme does not provide for automatic pension increases. Instead the trustees of the scheme have increased pensions in line with the annual consumer price index, in keeping with the discretion available to them under the rules of the scheme.
I have been advised by the Department of Finance that there is no general policy which imposes an obligation on public sector bodies such as Aer Lingus and Aer Rianta to provide pension increases in line with the public service system, that is in line with the pay increases of serving employees.
