AIB Enters Talks with Unions Over Pension Changes
15 June 2012 (PLANSPONSOREurope.com) - Allied Irish Bank, which trades in Northern Ireland as the First Trust Bank, will begin talks with unions over changes to contributions to its defined contribution (DC) scheme and pay and benefits as it seeks to close its defined benefit (DB) scheme to further accrual.
Staff members were told in a letter by CEO David Duffy the bank’s cost to income ratio in 2011 was 96.2% – a level “unsustainable in the current economic environment”.
Duffy added that AIB plans to transfer all employees, who are currently members of a DB scheme (including hybrid arrangements), to a DC scheme, while AIB’s executive committee has agreed to a 15% reduction in total compensation.
The bank has committed to a funding level of 10% and says it will engage in talks with unions about the potential to match additional contributions made by staff, adding it anticipates these changes will be implemented by the end of this year.
The BBC reports Irish finance union IBOA has rejected the proposals.