Pensions dispute could ground Shannon flights

FLIGHTS at Shannon could be grounded on September 20 as SIPTU has served strike notice, due to a dispute around the pensions of Aer Lingus and Dublin Airport Authority (DAA) staff.

Other unions have also voted to authorise industrial action but SIPTU’s decision to go ahead with it in three weeks brings some urgency to the matter.

Speaking to The Clare Champion this week, Liam Berney of the Irish Congress of Trade Unions outlined the background to the dispute. “There’s a common pension scheme between the DAA and Aer Lingus, it’s called the Irish airline superannuation scheme and essentially, there’s a very large hole in the scheme, there’s anywhere between €600 and €700 million of a hole there. We’re in negotiations with the employers trying to resolve the matter and so far, the employers have not come forward with any proposals that we can bring to the consideration of our members. Therefore, the unions decided to have ballots for industrial action, the ballots were carried overwhelmingly and we’re still awaiting proposals from the employers as to how the hole in the scheme will be addressed, that’s the long and the short of it really.”

He said that while there had been some proposals from the employers, they were far short of what was required. “There have been some discussions about shoring up the hole in the fund but they’ve fallen far short of financing the benefits that our members have accrued to date. People would still be taking a very significant cut in the benefits that they reasonably expected to get arising from their contribution to the scheme.”

He said he was reluctant to predict how the situation will play out. “I wouldn’t like to predict what’s going to happen frankly. The reality is that the employers could well come forward with a proposal that will meet our members’ concerns. That could happen. If that happens, it’ll mean there will be no need for industrial action. But if the employers don’t do that, I wouldn’t rule out the prospect of industrial action but nobody wants to be engaged in industrial action. It’s not something that we’d prefer, we’d prefer to have meaningful discussions and meaningful proposals on the table that we could then bring to our members for consideration, that’s really what we want to achieve.”

Mr Berney said there was still “plenty of time” to resolve the matter before September 20.
He also said the regulatory system is part of the problem as it imposes overly severe requirements. “One of the problems about pension provision in this State is that we have a thing called the minimum funding standard, which schemes are required to meet and it’s a very onerous standard. It’s a mathematical exercise that tries to value the scheme by reference to what it would cost to close it up at a particular point in time. The problem with that challenge is that it assumes that schemes like the IASS, that might have temporary financial difficulties, can’t repair those over time. One of the big difficulties is the regulatory system. It’s a very onerous system and the regulator and the pensions board require the IASS to have a proposal by March of next year and that deadline is a big problem as well.”