LCR20523

This dispute came before the Court following lengthy negotiations between the parties on issues concerning pension provision for Dublin Airport Authority staff (DAA) and Shannon Airport Authority staff (SAA). In this Recommendation a reference to DAA includes a reference to SAA. The issues in dispute include the funding of the Irish Airlines (General Employees) Superannuation Scheme (IASS) and other pension related matters. The IASS is a multi-employer scheme involving DAA and Aer Lingus as the principal subscribing employers. The IASS had an estimated deficit of liabilities over assets of some €779 million at 31^stDecember 2012 as calculated under the statutory minimum funding standard.

The parties have accepted that the scheme is unsustainable for active members in its current form and should be frozen. That is to say, contributions should cease, further accruals of service should stop and future pension arrangements should be provided through separate defined contribution pension schemes.

A similar dispute involving Aer Lingus PLC was also referred to the Court. The disputes were investigated separately but in parallel.

The range of issues arising in each of the companies that currently subscribe to the scheme is different and different solutions have been proposed. However, the Court’s objective is the same in both cases. That is to assist the parties in putting in place fair arrangements that will safeguard, as far as possible, the interests of current members of the IASS scheme and to provide the optimum level of further pension protection to affected employees consistent with commercial reality.

In the case of DAA significant progress was made in direct negotiations and in conciliation at the LRC. However final agreement could not be reached and a number of outstanding issues were referred to the Court.

For the avoidance of doubt the Court wishes to point out that the matters before it relate to the future pension arrangements of active members of the IASS in categories represented by the Trade Union Group and future employees of DAA in those categories. The Court has been informed that the DAA intends making separate arrangements in respect of deferred members of that scheme. The subject matter of the Court’s investigation did not involve the position of that cohort of DAA staff.

The issues referred to the Court in this case were summarised in the submission made to the Court on behalf of the unions as follows: -

• 
  1. Pension Expectation

  2. Employer contribution to new Defined Contribution Scheme

  3. The Proposed winding up of the Aer Rianta Supplemental Superannuation Scheme

  4. The Provision of sureties to staff of SAA that they will be treated identically to staff of DAA

  5. Loss of ill health pension provision

  6. Proposed changes to retirement age and introduction of medical / fitness testing for Airport Police and Fire Service Staff

  7. Freeze on Pensionable Pay

Having taken full account of these very helpful and skilfully argued submissions the Court recommends as follows: -

Pension Expectations

While the IASS scheme was normally coordinated with the State Social Welfare Pension, the vast majority of employees of DAA retired with an un-coordinated pension. Against that background the Unions contend that the transfer value of accrued benefits to the proposed new scheme should be augmented by an amount equal to the value of the un-coordinated element of the pension that employees would have achieved had the scheme continued unaltered. The DAA partially conceded this aspiration and has offered to provide a once-off capital sum intended to secure, subject to actuarial assumptions, 55% of the un-coordinated element. The DAA also proposed to provide an amount of €250 per employee for each complete year of IASS membership. The Unions are seeking to secure 100% of this element in the proposed transfer to the new scheme.

The Court recommends that the DAA provided a once-off capital lump-sum sufficient to secure 65% of the un-coordinated element in addition to the actual transfer value of accrued pensions from the IASS. This amount should be provided over a five year period. This is to include the amount of €250 per year of completed service which the IASS previously offered by DAA.

The Court further recommends that DAA should provide an underpin to those active employees associated with this dispute who will become pensioners between the date of this recommendation and 30^thJune 2018.

DC Contribution Rates

Currently some staff’s shift earnings are pensionable (through the Aer Rianta Supplemental Superannuation Scheme ARSSS) while others are not. To address this anomaly the DAA propose that all employees who work shift will have their shift payments included in their pensionable pay. The difference is significant in terms of the actual amount that will be paid into the new defined contribution scheme.

The Court recommends the following employer and employee contributions should apply: -

The DAA offered to enhance statutory transfer values for active members (the current actuarial position can facilitate transfer values at 100% of their statutory amounts) by a total amount of €250,000. The Court recommends that this amount should be increased to €750,000.

The Provision of sureties to staff of SAA that they will be treated identically to staff of DAA

The Court recommends that the assurances sought by the Union Group under this head of claim be provided.

Loss of ill health pension provision

The Court recommends that DAA proposal be accepted subject to the qualifying period being reduced to one year.

Proposed changes to retirement age and introduction of medical / fitness testing for Airport Police and Fire Service Staff

The Court recommends that the DAA proposal in relation to Airport Police and Fire Service staff be accepted.

Freeze on Pensionable Pay

The Court recommends that Pensionable Pay be frozen for a period of five years from date of agreement.

Implementation

The Court recommends that all elements of this recommendation be implemented within a period of four weeks of acceptance by all parties.

Signed on behalf of the Labour Court



Kevin Duffy
24th May, 2013______________________
JFChairman



NOTE

Enquiries concerning this Recommendation should be addressed to John Foley, Court Secretary.