Leo Varadkar (Dublin West, Fine Gael) | Oireachtas source

At the outset I should make it clear that as Minister for Transport, Tourism and Sport I have no function in relation to this matter, and for that reason there is little I can say.

The resolution of the funding difficulties in the Irish airlines (general employees) superannuation scheme, IASS, is primarily a matter for the trustees, the members of the scheme, the companies participating in the scheme and the regulator of such pension schemes - the Pensions Board. The IASS is a multi-employer scheme involving the employees of the Dublin Airport Authority and the former SR Technics, SRT, as well as Aer Lingus. It is estimated that Aer Lingus membership constitutes around 69% of the total, with DAA and SRT representing 27% and 4%, respectively.

The funding situation is clearly of concern for the 14,800 or so members of the scheme and their families. Indeed, similar funding concerns are affecting many defined-benefit pension schemes at present across the country. It has been reported that the Pensions Board has written to the trustees of the scheme indicating that some aspects of the outline funding proposal for the scheme are not acceptable to the board. It is understood that the Pensions Board and the trustees will have further discussions on the matter.

The future funding arrangements in the IASS scheme have been a key uncertainty in Aer Lingus's finances in recent years. As a minority shareholder in the company, the Government would welcome a resolution of the matter and has always encouraged the parties to engage fully in the process using the State industrial relations apparatus where necessary. However, as Minister I do not have a role in the resolution of the funding difficulties - that is a matter for the trustees, the companies participating in the scheme, and its members. They must agree to any decision that is made.

The various stakeholders in the scheme have been engaged in discussions regarding the funding of the scheme for a number of years now. After failure to reach agreement in previous discussions, in November last year IBEC and ICTU issued a joint statement requesting that the Labour Relations Commission, LRC, make contact with Aer Lingus and its union groups on the funding of the scheme. The parties then engaged with the Labour Court for the purposes of setting out recommendations on the resolution of the pension issue and the court issued its recommendations on 24 May 2013. Separate recommendations were issued to DAA and Aer Lingus on the matter. Following consideration of the recommendation in relation to Aer Lingus, the company stated that it believed that the Labour Court's recommendation represented a compromise that could form the basis upon which a solution could be implemented in the interests of all parties, including shareholders, employees and customers. The Labour Court recommendation included a cash injection of €110 million to a new defined-contribution scheme and a one-off contribution of €30 million to the same new defined-contribution scheme in respect of former employees who are deferred members of the IASS. Aer Lingus stated that any implementation of the recommendation is dependent on a series of further steps. These steps include, but are not limited to, the following agreements being reached and approvals being achieved: agreement with the Irish Congress of Trade Unions and the trade unions concerned; agreement by the trustee of the IASS with the sponsoring employers; Aer Lingus shareholder approval; trade union member ballot approvals; approval of IASS rule changes by affected members; and the successful conclusion of a range of implementation steps, including rule changes, by the trustee of the IASS among others.

The company has said that if these further steps are achieved it will seek shareholder approval to implement the measures. The State's shareholding is in the name of the Minister for Finance, and the relevant Ministers will consider any such proposal carefully before casting a vote on the matter. The company said it would engage directly with ICTU and the trustees on the matter. The company will issue further updates as and when appropriate.

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