Dáil Éireann debate -
Tuesday, 27 Nov 2001

Vol. 545 No. 1

Written Answers. - Pension Provisions.

Trevor Sargent

Question:

42 Mr. Sargent asked the Minister for Public Enterprise if she will ensure the committee established by her to address the grievances of Aer Lingus and Aer Rianta pensioners includes RASA; when the airline pension will be brought into line with other State and semi-State pensions; and if the airline pension will in future remain in line with average industrial wage increases. [29768/01]

Jack Wall

Question:

62 Mr. Wall asked the Minister for Public Enterprise her plans to assist members of the Retired Aviation Staff Association in their campaign for enhancing pension increases following the erosion of payments over a number of years; and if she will make a statement on the matter. [29793/01]

Minister for Public Enterprise (Mrs. O'Rourke):

I propose to answer Questions Nos. 42 and 62 together.

The task force on Aer Lingus and Aer Rianta pensions established by the chairmen of the companies concerned at my request to examine concerns about the Irish airlines – general employees – superannuation scheme completed their work and submitted a report to the chairmen of the companies at the end of May 2000.

Having regard to the question of pension increases, I understand that the rules of the Irish airlines scheme do not provide for pension increases in line with pay movements. However, I have been advised 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 and are matters for the trustees having regard to the rules of the scheme. I have no function in relation to such matters.

I have been advised that neither Aer Lingus nor Aer Rianta are in a position to provide additional annual payments into the pension fund to meet the claim by the retirees association. I understand that both companies have been meeting all of their liabilities towards the pension fund in accordance with the rules of the scheme. In so far as policy concerning pension increases of State companies is concerned, I understand from the Department of Finance that there is no general policy which imposes an obligation on State bodies to provide pension increases in line with the public service pay system, that is, in line with the pay increases of serving staff. There has not been any change in this policy.

As regards pension enhancements to benefit both serving staff and existing pensioners going forward, I have been advised that Aer Lingus had initiated discussions earlier this year with employee representatives on the terms of a new pension scheme in the context of the privatisation of the airline. I know those discussions are not now being progressed because of the extra costs involved for the company which would not be sustainable in present circumstances given the current financial crisis in the airline.

As far as Aer Rianta is concerned, the company, in consultation with staff interests, proposes to establish its own pension scheme with the same benefits as in the existing Irish airlines scheme. Any enhancements to benefits from the proposed pension scheme would be contemplated only in the context of the implementation of a programme of strategic change in that company. As Deputies will be aware, I committed the case made by the Retired Aviation Staff Association for enhanced pension increases for Aer Lingus and Aer Rianta pensioners to my colleague, the Minister for Finance who has overall responsibility for pensions in the public sector. I recently received a reply from him, the contents of which have been communicated to the retirees' association.

The Minister for Finance does not consider that it would be appropriate to accede to the request from the retired aviation staff association for an Exchequer injection and that there must be adherence to the long standing policy in this area, namely, that pension entitlements for employees of commercial State Bodies which includes Aer Lingus and Aer Rianta are a matter for the trustees, the members of the relevant pension scheme and the companies involved.

Questions Nos. 43 and 44 answered with Question No. 36.