Dáil Éireann Debate, Tuesday - 31 May 2005
306 Mr. Bruton asked the Minister for Transport if his attention has been drawn to the request by an association (details supplied) that some of the proceeds of the sale of State shareholding in companies should be used to strengthen the pension funds which have been unable to match the expected pension benefits in recent years; and if he will make a statement on the matter. [17840/05]
Amharc ar fhreagra311 Mr. Bruton asked the Minister for Transport his assessment of the pension deficit in the Aer Lingus and Aer Rianta pensions; if he has met the Retired Aviation Staff Association to discuss the possibility that some of the proceeds of the partial privatisation of Aer Lingus will be used to strengthen the pension fund; and if he will make a statement on the matter. [17842/05]
Amharc ar fhreagraI propose to take Questions Nos. 306 and 311 together.
Numerous meetings have taken place between the Retired Aviation Staff Association, RASA, representatives and the companies and also with previous Ministers and officials from my Department and the Departments of the Taoiseach and Finance to discuss the pension scheme. I met representatives of the group on 19 January last. The main RASA claim relates to salary and CPI indexation of their pensions.
As the pensions are being paid in line with the terms of the scheme, there has been no obvious solution to the RASA concerns despite detailed examination. However, I indicated at that meeting that I would ask the companies concerned to keep the matter under review. One of the difficulties with the scheme is that it is a multi-employer scheme which, in addition to Aer Lingus and DAA staff, also includes a private sector company, SR Technics, formerly FLS Aerospace.
While the payment of CPI is discretionary, I understand that other than for six years in the 1980s following a period when Irish inflation was at a very high level, the trustees have been able to increase pensions annually in line with the increase in CPI. In 2000, pensions were adjusted to the level they would have been at, had the full CPI increases been paid in the 1980s and since 1988, the scheme has increased pensions annually by the change in the CPI, including this year.
In relation to claims about a deficit in the pension scheme, the last actuarial valuation which was carried out in March 2003 satisfied the minimum funding standard included in the Pension Act 1990. The next full actuarial valuation was due in March 2006 but the trustee decided to bring this forward to end March 2005. I understand that the report is expected to be finalised by the end of June.
While the payment of pensions is always dependent on the actuarial position of the scheme, I understand that actuarial advice to date has been that the scheme is able to continue to pay the current level of pensions to existing pensioners. However, the question of whether such pensions can continue to be increased in line with inflation depends on the performance of the scheme going forward.
If a deficit did arise, the rules of the pension scheme provide that the trustee has to decide what action to take but the rules also indicate that there is no obligation on the part of either employers or members to increase contributions. I assume that the trustee, employers and staff would work together in those circumstances to try and agree a mutually satisfactory outcome.
I emphasise that the pension entitlements for employees of commercial State bodies, including Aer Lingus and the Dublin Airport Authority, DAA, formerly Aer Rianta, are matters primarily for the trustee, the members of the relevant scheme and the companies involved. The State has no involvement in the funding of these schemes. The question of an injection of State funds into the pension scheme, from whatever source, does not arise as any such proposal would run counter to established policy in this area and would, in all likelihood, be challenged by the European Commission as a state aid.
