Resolution of the funding difficulties of the Irish Airlines (General Employees) Superannuation Scheme (IASS) is primarily a matter for the Trustees, the companies participating in the scheme, the scheme’s members and the Pensions Authority. The process currently underway involves all of these stakeholders.
The Deputy has referred to Section 34 of the State Airports (Shannon Group) Act 2014 and the requirement for the Trustees to have due regard to the interests of the different categories of members. I wish to point out this requirement is only one of a number of finely balanced criteria the Trustees must take into account when amending the scheme. Section 34 of the Act states that the Trustees may make amendments "as they consider appropriate in the overall interests of the scheme members and with due regard to the interests of the different categories of member, having regard to such matters as the trustess consider relevant including the funding deficit of the scheme, the potential impact of the deficit on the interests of the different categories of members and any other superannuation provision made for such members". The challenge of meeting these criteria is heightened because the scheme itself is complex, inflexible and involves multiple employers and many classes of employees.
The Trustees must also comply with the provisions in the Pensions Act 1990 which, among other things, sets down certain requirements in relation to the funding of pensions schemes.
Given the considerable complexities involved, an Expert Panel was tasked with undertaking a detailed investigation to identify the fairest way to distribute the burden of contributions required by the scheme while also addressing the range of impediments faced by the scheme. The Panel released its report in June this year and issued recommendations in respect of active members. It also recommended that the IASS Trustees engage with the employers on ways to alleviate as much of the impact of the Trustees' proposal as is possible in respect of deferred members whilst also recognising the overall affordability to the employers of the proposals. As a result of the Expert Panel Report and the engagement between the Trustees and employers, there was an uplift in the monies to be provided by the employers outside of the IASS in respect of active and deferred members and which goes a long way towards mitigating the benefit cuts proposed by the IASS Trustee.
It is important to emphasise that it is also the Expert Panel's definitive view that these proposed measures represent the best possible outcome that can be achieved and that if this final opportunity to resolve this very protracted problem is not grasped now, the situation facing members of the IASS will deteriorate further.
I agree with the Panel’s view and I sincerely believe that, in the circumstances, the proposed package of measures offer the best possible outcome for all concerned. It was on that basis, and on the basis that the Trustees decide to proceed with changes to the scheme at the end of the consultation process in the manner proposed, that I decided I will sign the relevant Commencement Orders. I have no intention of further reviewing the work of the Expert Panel before doing so.
