Dáil Éireann - Volume 538 - 20 June, 2001

Other Questions. - Pension Scheme.

33. Proinsias De Rossa asked the Minister for Public Enterprise if she will outline the action she proposes to take in support of the case put forward by the Retired Aviation Staff Association concerning the erosion of their pensions over the past ten years; and if she will make a statement on the matter. [18079/01]

56. Mr. R. Bruton asked the Minister for Public Enterprise if she has received a submission from the annual general meeting of the Retired Aviation Staff Association; if she plans to meet its representatives to discuss its grievances; and if she will make a statement on the matter. [14579/01]

Mrs. O'Rourke: I propose to answer Questions Nos. 33 and 56 together.

I am fully aware of the concerns of the Retired Aviation Staff Association. Over the past two years I have responded to numerous representations in relation to the concerns of RASA about the Irish airlines (general employees) Superannuation Scheme. I have also met representatives from this organisation and senior officials from my Department met the association on three occasions over the past year most recently last month. In addition, the association has also met [834] senior management representatives from Aer Lingus and Aer Rianta in relation to their concerns.

In so far as pension increases under the Irish airline (general employees) superannuation scheme are concerned, I understand from Aer Lingus that the trustees of the scheme have increased pensions in line with the annual consumer price index in keeping with the discretion available to them under the rules of the scheme.

As regards pension enhancements in a new scheme to benefit both serving staff and existing pensioners, the companies' position is that these will emerge from negotiations with representatives of staff which are associated with strategic change initiatives. It is Aer Lingus's intention to implement the new pension scheme as soon as possible after the privatisation of the airline is completed.

Aer Lingus management has proposed that in the new scheme, pensions will increase in line with the annual consumer price index provided that it does not exceed 5%. Furthermore, should the CPI exceed 5%, the trustees of the new scheme may at their discretion award further percentage increases to pensions in payment on the basis of advice from the scheme's actuary. It is also proposed that the new scheme will provide improved benefits in areas such as guaranteed pension payments periods and death-in-service benefits. Aer Lingus advise that the overall terms of the proposed new scheme would be in line with practice in the private sector and, in many cases, would have better benefits.

In so far as Aer Rianta is concerned, the company proposes to establish a new scheme as soon as possible in consultation with staff interests. I understand that new scheme will be along the lines of the new scheme outlined by Aer Lingus. The terms of the proposed new pension schemes are essentially a matter for the companies concerned to negotiate with staff interests. Existing Aer Lingus and Aer Rianta pensioners who transfer to the new Aer Lingus and Aer Rianta schemes will receive the improved benefits when the new schemes are introduced.

Mr. Stagg: The Minister's reply is hypocritical in the extreme. Does she agree she has strung along these pensioners for the past two years with blather and humbug – more of what we heard today – that has nothing at all to do with the case? Does she agree she expressed her sympathy to the pensioners directly about their case, that she was hopeful about the case and that it was her wish that a positive outcome would be achieved, but that recently she refused to meet them? Does the Minister agree that she did not lift a finger after the meetings either between her officials and the pensioners and herself and the pensioners to make the necessary case on their behalf to the Minister for Finance, the chairman of Aer Lingus or Aer Rianta and that their record demonstrates that is the case? Does she agree that her treatment of the 4,500 pensioners is [835] shabby and shameful and that she led them up the garden path and sold them a pup?

Mrs. O'Rourke: I did not sell anybody a pup.

Mr. Stagg: The Minister did.

Mrs. O'Rourke: I directly asked the chairmen of Aer Lingus and Aer Rianta if they would set up task forces. That is on record.

Mr. Stagg: On pensions, not on this case. Do not mix up the two.

An Leas-Cheann Comhairle: Allow the Minister to speak without interruption.

Mrs. O'Rourke: On the group of retired RASA who came to me. I asked the chairmen of both boards if they would meet them and if, having met them, they would set up task forces. That was a direct request from me.

Mr. Stagg: They refused the Minister's request.

Mrs. O'Rourke: It is in writing. They set up two task forces.

Mr. Stagg: They did not even hear the pensioners.

An Leas-Cheann Comhairle: Deputy Stagg, allow the Minister to speak without interruption.

Mrs. O'Rourke: They then issued their reports. I met them myself. The officials met them on three occasions. The last meeting was on 21 May 2001. I intend to commit the case and to ask the Minister for Finance—

Mr. Stagg: It is about time.

Mrs. O'Rourke: — if he will look at the matter. We do not deal with pensions, as the Deputy will know. Pensions are a matter for the Department of Finance. Following the last meeting between the officials and the RASA, I intend to commit the case to the Department of Finance which has been apprised all along. In fact, officials from the Department of Finance have been with our officials at the meetings with the pensioners. I intend to apprise the Minister for Finance of the case to date.

Mr. Higgins (Mayo): Does the Minister appreciate the disappointment, dismay and the anger of pensioners? All one has to do is read the resolutions that came from the recent annual general meeting. I have seldom seen a group of people so aggrieved express so cogently their genuine dismay at the way they were treated. Does the Minister recall that when we raised this matter on 19 October last, we got a very clear indication from the Minister that something was [836] about to happen? That was the clear understanding the Minister conveyed.

Does the Minister acknowledge that these 4,500 pensioners have a genuine case by virtue of the fact they effectively carried both companies on their backs and made titanic sacrifices in serving the public interest? They now feel that they have been jettisoned and thrown to the wolves. At their time of highest dependency they are on derisory low pensions and the balance will have to be made up. What is the difference between this case and the Irish Hospital Sweepstakes Trust workers? Legislation was, thankfully, brought before this House for the Sweepstakes workers by the Tánaiste and Minister for Enterprise, Trade and Employment to bring their income up to a reasonable level so that they could have a dignified level of existence at this stage of their lives.

Mrs. O'Rourke: I genuinely feel that they have a case and I am not afraid to say it even though I am derided when I do.

Mr. Stagg: The Minister did not meet them and now her own backbenchers are pressing her on it.

Mrs. O'Rourke: I met them and the officials have met them on three occasions. I am now going to commit the case to the Department of Finance which deals with pensions.

Mr. Stagg: The Minister said in a previous reply in the House that she would not proceed with the IPO for Aer Lingus, or any other sale, until this matter was addressed. She understood the matter and was expressing her sympathy – which I would say is false sympathy. Will she reiterate to the House that she will not proceed with the IPO or any other form of sale of Aer Lingus until this matter is dealt with? Will she now guarantee that she will not simply get an official to write a statement of fact to the Department of Finance, but that she will be an advocate on behalf of these pensioners? The pensioners have put forward a modified claim; it will cost Aer Lingus £2 million and Aer Rianta £1 million.

Mrs. O'Rourke: Those are not the costings which were given to us at the last meeting with my officials—

Mr. Stagg: It is the costings they gave me, £33 million over ten years.

Mrs. O'Rourke: Furthermore, when I express sympathy with anybody in any difficulty, I mean it. I have known enough horror in my own life and I do not express false sympathy with anybody.

Mr. Stagg: Does the Minister agree that the pensions scheme to which she referred in her answer has nothing to do with this case? It is about a pensions scheme for existing employees. If these pensioners are tied into a scheme where [837] they have their pensions indexed to the cost of living increases – which are very low despite the fact that wages have been increasing – in relative terms their pensions will be slashed. Everybody else gets increases in their pensions directly related to the wages of their colleagues who are working.

Mrs. O'Rourke: The difficulty with RATA relates to the period from 1989 to the new scheme which has been introduced. With regard to pension enhancements in the new scheme, both serving staff and existing pensioners will benefit when Aer Lingus and Aer Rianta adopt this scheme. The difficulty lies in the decade in which they were not on the type of scheme into which they will now go.

Mr. Stagg: They have submitted a modified form to cover that withering of their pensions. Does the Minister agree that if that is not done, they will be applying their new pension to a very low base and they will never catch up?

Mrs. O'Rourke: That is the problem.

An Leas-Cheann Comhairle: That concludes Question Time.

Written Answers follow Adjournment Debate.