Written answers

Tuesday, 28 March 2006

Department of Transport

Pension Provisions

11:00 pm

Photo of Richard BrutonRichard Bruton (Dublin North Central, Fine Gael)
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Question 300: To ask the Minister for Transport the procedures under which the Government will provide moneys to supplement the Aer Lingus pension fund; if such top-ups of the fund include persons who were formerly Aer Lingus employees but are now employed separately as a result of disposals or contracting out arrangements; and the most recent reports which he has received in respect of shortfalls in the pension funds. [11947/06]

Photo of Martin CullenMartin Cullen (Waterford, Fianna Fail)
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The Minister for Finance and I are currently considering the report prepared by our advisors on the nature, scale and timing of an investment transaction for Aer Lingus. The advisers report identifies issues that should be resolved in relation to the company's pension schemes. I understand that, on the basis of the most recent actuarial valuation, the Irish airlines superannuation — general employees — scheme is in deficit if provision is to be made for future increases in pensions to reflect growth in the consumer price index, CPI. I also understand that, under the rules of the scheme, there is no guarantee in relation to the granting of increases in pensions. Such increases are entirely at the discretion of the trustees of the scheme. If no such increases were to be paid then the scheme would in fact be in surplus. The scheme is a multi-employer scheme with the Dublin Airport Authority and SR Technics being employer members alongside Aer Lingus. The issue of funding is a matter for the participating employers and the members of the scheme.

However, in light of the issues raised in the adviser's report on the Aer Lingus investment transaction, I asked the company to assess the options to deal with the issues. An increase in contributions by the company and employees would be an essential part of any solution. It may be possible, in the context of an overall solution to the pension issue, that the company may utilise some of the equity raised in a transaction for the purpose of meeting part of its commitment to resolving the funding requirements. Based on advice received to date, I do not anticipate any obstacles to implementing a solution along these lines. Recently I asked the company to engage intensively with the trade unions and their advisers in relation to their proposal on the pensions issue. I hope to revert to Government in the coming weeks in the light of the progress in that process.

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