Phil Hogan (Carlow-Kilkenny, Fine Gael)
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Question 51: To ask the Minister for Transport if he will report on the current financial position of the Aer Lingus pension scheme; the extent to which this scheme is currently in deficit; the way in which he intends to deal with this deficit in advance of any sale; and if he will make a statement on the matter. [21163/05]

Richard Bruton (Dublin North Central, Fine Gael)
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Question 78: To ask the Minister for Transport his views on moves to remedy the deficit in the Aer Lingus pension fund in the context of privatisation. [18328/05]

Martin Cullen (Waterford, Fianna Fail)
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I propose to take Questions Nos. 51 and 78 together.

As I have indicated in the House on previous occasions, the pension scheme for general employees in Aer Lingus, the Irish airlines — general employees — superannuation scheme, is a multi-employer scheme which also includes the Dublin Airport Authority, DAA, and SR Technics, formerly FLS, a private sector company. I understand that the employers in the pension scheme have been meeting all their liabilities towards the pension fund in accordance with the rules of the scheme.

In regard 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. The preliminary actuarial advice at end March was that the scheme continues to meet the minimum funding standard and as a result, the trustees increased pensions in line with CPI again this year. Aer Lingus is expecting to receive the formal actuarial report shortly. While the payment of pensions is always dependent on the actuarial position of the scheme, I understand that the scheme continues to be able 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, as has been the practice for years, depends on the performance of the scheme going forward. The position will be clearer once the actuarial report has been issued.

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 must emphasise that the pension entitlements for employees of commercial State bodies, including Aer Lingus and the DAA, 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.