I thank the Minister of State for being present. It is refreshing to have a Minister from the relevant Department take this matter.
The Minister will be aware that the Aer Lingus pension fund has been a running sore for many years. The appropriate time to tackle this issue, which has already been addressed by both Houses, is before privatisation, which is around the corner sometime next year, and when the Government will have a great deal of funding and resources as a result of privatisation. Some of these funds, and we are not talking about vast sums, should be used to address a matter of gross discrimination against Aer Lingus pensioners. The problem is that they are paid a great deal less than other semi-State pensioners. That is an injustice and the reason for it is historical.
The Minister of State will know that the Aer Lingus pension fund is not normal. For historical reasons it is run by trustees and they decide how to administer it and on any increases. As a result, there are no real rules or index linkage and pensions have fallen a long way behind. In addition, this pension scheme has been poorly funded. The reason for this is that the pensioners paid 5% of their salaries into the fund while the employer, who is the State, did not pay the normal amount paid by an employer and only matched the pensioners' amount; in some cases it did not equal it. This means the fund is grossly under-funded and the amounts that can be paid out are limited by the way the fund has been managed. I think the Minister of State will acknowledge that this is an anomaly in the semi-State system and it is one which the 1,200 Aer Lingus pensioners feel extremely sore about. They feel particularly sore because at the time of the Cahill plan, when Aer Lingus was in such appalling trouble, the State came to the rescue by injecting £175 million. That is a past battle.
The Cahill plan was a successful rescue job. Bernie Cahill and the Government rescued the national airline from bankruptcy. There was an awful lot wrong with Aer Lingus at the time. Many of its staff were required to make great sacrifices in terms of working conditions and salaries. This restraint meant that their basic pay was lower than it would have been and they fell behind the normal rate paid in other semi-State bodies. This restraint was fine as a temporary measure and is laudable and the employees who made these sacrifices should be applauded for what they did. However, they probably did not think that when they took a reduction in pay their pensions would be affected. By making this great sacrifice at the time of the Cahill plan these people have landed themselves in a situation where their pensions are lower than normal.
The Minister of State would be aware, as I would, if we in the Oireachtas had to take a serious reduction in our salaries. Whether we should do this is another issue. If we did this it would have a long-term effect on our pensions. Perhaps a sacrifice of this sort should be expected from public servants when there are extreme difficulties in the national finances or finances of semi-State bodies.
It is not fair for these sacrifices to continue in perpetuum because Aer Lingus has come out of its difficulties. Last year it made a profit of £53 million or 75 million. That is a tremendous achievement for an airline that was in receivership and bankrupt a few years ago. A few bodies have been strewn behind, not only those who took voluntary redundancy but those who made a sacrifice. They made a sacrifice, in effect, for the rest of their lives.
The disparity in pensions can be best illustrated by one figure. Since 1990 pensioners in other parts of the public service have received an increase of about 55% while Aer Lingus pensioners have only received an increase of 26%. That is pitiful for those who were prepared to make personal sacrifices to save the airline.
As the Minister of State will know, the problem is not so much the income requirement but the capital requirement. A capital injection in the pension fund is needed more than anything else. The pension fund is under-funded and is unable to give these people what they require and deserve.
Apart from topping up the pension fund in order to draw more income from it, the Minister of State should give a commitment here that at the time of privatisation, when the money will be flowing in for fleet replacement and other purposes, the Government will bring Aer Lingus pensions into line with other semi-State bodies. I do not know how much such a move would cost. Perhaps the Minister of State has an idea about that. The amount would not be anywhere near the amount of money that will be paid to the advisers working on the flotation. In the case of Eircom, between £60 million and £70 million was paid to advisers. A lot less would be paid to them when Aer Lingus is floated. But proportionately it would take only a small amount to top up the pension fund in order to make the lives of those who made sacrifices far more tolerable and remove a running sore.
This pension fund should be index linked. It is very unfair that it is not index linked and is at the mercy of its trustees. If there is no money in the fund the trustees cannot grant an increase in incomes. They have increased the pension and they will do it but there has been one occasion where they have not.
There is a need for the spouses of the Aer Lingus pensioners to live. Their pensions are reduced accordingly when their spouses die. They should be able to live in the sure knowledge that their pensions will be safe and will not deteriorate and devalue over the years to come.
I beg the Minister of State not to palm me off with a reply written by his civil servants. I want him to give me a commitment that this matter will be examined. I know there is a new plan in train. It addresses the income issue but not the basic problem of the very low wages paid to these people which resulted in low pensions. I beg the Minister of State to give me a commitment that he will consider the base position as a source for what will be a tiny amount of the capital and proceeds of the flotation in order to help these people who made such a great sacrifice for the national airline.
