Thursday, 19 October 2000
Dáil Eireann Debate
8. Mr. McDowell asked the Minister for Public Enterprise if, following her meeting with the Retired Aviation Staff Association, she is in a position to meet its concerns in relation to the Irish airline general employees superannuation scheme; and if she will make a statement on the matter. [22674/00]
40. Mr. R. Bruton asked the Minister for Public Enterprise if she will arrange to meet with the Retired Aviation Staff Association on its concerns about its pension fund as soon as possible. [20971/00]
66. Mr. Callely asked the Minister for Public Enterprise the developments with regard to concerns raised by Aer Lingus and Aer Rianta pensioners in connection with the Irish airlines gen eral employees superannuation scheme; the time schedule for such concerns to be resolved; and if she will make a statement on the matter. [22529/00]
Mrs. O'Rourke: I met representatives from the Retired Aviation Staff Association on 10 October 2000 to hear details of its submission for enhanced pension benefits presented to the task force. At the meeting I undertook to raise the concerns of the association with the chairmen of Aer Lingus and Aer Rianta. I hope to have meetings on that matter next week. I also undertook on behalf of the association to clarify some issues with my colleague, the Minister for Finance, on receipt of additional information from the association, which is awaited. It said it would send it to me.
The task force on pensions established by the chairmen of Aer Lingus and Aer Rianta at my request to examine concerns about the Irish airlines general employees superannuation scheme submitted a report to the chairmen of the companies concerned at the end of May 2000.
The task force report summarised the main concerns and views about the pension scheme made by various representative associations in submissions and presentations and an independent actuary costed the various proposals received.
Following receipt of the task force report, Aer Lingus and Aer Rianta commissioned separate reviews of the report. As far as Aer Rianta is concerned, the company proposes to establish a new pension scheme in due course in accordance with section 32 of the Air Navigation and Transport (Amendment) Act, 1988, and the company is giving consideration to this matter.
Aer Lingus, as a result of its review and having regard to the structure and terms of the existing scheme, decided that the most appropriate course of action was to set about establishing a separate pension scheme for relevant Aer Lingus staff. In light of these circumstances, the airline has been discussing the terms of a proposed new pension scheme with employee representatives. The company has also recently outlined its proposals to the Retired Aviation Staff Association.
Appropriate enabling provisions to allow Aer Lingus to establish the new pension scheme are contained in the Aer Lingus Bill, 2000. Under those provisions, it is proposed that existing Aer Lingus employees will transfer to the proposed new pension scheme while Aer Lingus pensioners will have the option of either remaining in the  existing scheme or alternatively joining the proposed new scheme.
An Leas-Cheann Comhairle: Deputy Richard Bruton has submitted a question. I advise Deputy Stagg that there are two oral questions being taken. One, in the name of Deputy McDowell, was the first submitted and one in the name of Deputy Bruton but as Deputy Bruton—
Mr. R. Bruton: First, does the Minister accept that resolving the issues posed for retired aviation staff is not solely a matter for the chairmen of the companies involved? She seems to suggest in her reply that this was a matter she passed on to them. Does she accept a Government role in this? Is she aware that the retired aviation staff indicated, and I cite their resolution, that both companies totally refused all aspects of their claim? Will she comment on that statement by them which is based on actual discussions relating to the shortfall in their pensions? On the actuarial costs, can she confirm that the shortfall in the pension would require an investment in the order of £50 million to make good the shortfalls to existing pensioners? How does she see that shortfall being made good because she indicated that those who built the company would not suffer in her watch?
Mrs. O'Rourke: When I met the members of the Retired Aviation Staff Association last week I accepted very clearly that they had many points which must be addressed. There is no particular objective in their telling me what we would all know, that people at that time worked far more difficult hours, under far more difficult circumstances, than people have to work now. Clearly, they have a case. They asked me if I would pass on their concerns and I undertook to do so. I will do so next week at two separate meetings. I also have already conveyed to the Taoiseach, privately and personally, my belief that this matter must be addressed adequately and I hope that with commitment I will be able to do so. The first step I was asked to take was to convey their concerns and their dissatisfaction to the two chairmen, which I will do. As Members will realise, this matter did not arise during the past week or number of years; it is an ongoing matter. It is sad to meet people of that age, see their payslips and know how little they are receiving.
Mr. Stagg: I thank the Minister for her reply and also for her positive attitude towards the case made to her by the pensioners. Does she agree that the task force in reporting, ignored the case  made by the pensioners? Not alone did the companies ignore it, but the task force totally ignored it and made no reference to their case in reporting. That left the companies free to take the decision they did. Does she agree that the historical aspect of this matter goes back some 30 years and that the company does not pay enough contributions and therefore, there is not enough funds in the kitty to have a proper pension scheme? For example, is the Minister aware that Aer Lingus and Aer Rianta pay 6% as an employer, the ESB pays 11.9%, Irish Cement pay 13%, Irish Life pays 19%, P.J. Carroll paid 21% and Aer Lingus pays 6%? The Minister agreed that the insufficiency of employer contributions into the pension funds is the basis of the problem. Does she agree and is she aware that, arising from the historical shortfall and the consequent slippage, Aer Lingus pensioners of about 20 years are now on about half the pension they would otherwise have expected?
Mrs. O'Rourke: I thank the Deputy for his concern. He and two Deputies of my party asked me to meet the people concerned and I was glad to do so. This goes back many years and I hope to receive a table illustrating this matter today or tomorrow. Alone among the semi-States, the contributions have not matched the contributions made by other semi-State employers over many years. This matter was raised on various occasions by Ministers to whom people had come with their stories, but it never developed into an effort to match up the pensions or make them commensurate with those in other semi-State bodies. It is a task for which there must be a fair amount of goodwill and a great deal of work must be put into it. However, I hope and am sure that we can manage it. I intend to stick with it. I do not know if we will be able to meet all the concerns but I intend to stick with the matter until we hopefully can resolve it. It would not be correct to progress on any matter in Aer Lingus if we did not try to rectify that particular matter over many years.
Mrs. Owen: First, will the Minister clarify what she said in her reply that both Aer Rianta and Aer Lingus were examining the possibility of establishing new separate pension schemes? Would such new schemes only affect those people who will be entering them – in other words, people currently still at work – and would not take into account the shortfall for the existing pensioners? Second, the Minister said there is an appropriate clause in the Aer Lingus Bill but in view of her answer the other day, that she would not be proceeding with the Aer Lingus privatisation for some time yet, could she give a commitment that any legislation required would be introduced separately from the Aer Lingus Bill so that we would not have to wait for the major legislation? Finally, will she examine the precedent created by the Hospital Sweepstakes legislation brought in by her colleague, the Tánaiste, Deputy Harney, whereby pensions were paid to a group  of pensioners where there was a huge shortfall in the pension fund or no pension fund at all? Perhaps the same precedent could be used here to put in this extra £50 million needed to upgrade the pensions.
Mrs. O'Rourke: I do not know the exact amount – the figure of £50 million was put forward by Deputy Bruton. That provision which was made for the employees of the Hospital Sweepstakes has been drawn to my attention. I am proceeding with the Bill. I told the Deputy in reply to her very good question, which I was glad to hear, that while the present industrial relations unrest continues at Aer Lingus, it would be a folly for me to proceed with looking for a flotation in those circumstances. However, that does not mean, as I said yesterday – I see what the Deputy said in The Irish Times—
Mr. Stagg: The Minister has partly agreed with my point that the new proposals do not address a great number of the issues raised by the pensioners, for example, not just the level of the pension itself but the spouse pensions, the death in service payments, the fact that Defence Forces service and the fact that apprenticeship services are not taken into account for pension purposes. There is a list of items that are unusual in the scheme. Does the Minister agree that the new proposals do not address these issues and alternative ones are required to address the specific problems of existing pensioners? Is the Minister saying, and I would welcome this, that Aer Lingus will not be privatised before this issue is resolved?
Mr. R. Bruton: Is the Minister alarmed that the attitude of the companies involved is one of ignoring the claims of the pensioners, to quote from the report of their discussions? Against that background is she not equally alarmed that the companies will make provision for existing employees and ignore those who built up the company? Does she agree that the pensioners are looking to her to deliver on that shortfall? What will she say to the chairman and the board about their responsibilities? What did she say to the Taoiseach about the Government's responsibility? Did she talk numbers, namely, a shortfall of 76—
Mrs. O'Rourke: I reported to the Taoiseach that I met the retired aviation staff members on 10 October and on the tenor of our meeting. I did not go into detail but I will come back to him with that.
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