Aer Lingus Fears Significant Loss Connected to Any IASS Legal Challenge
31 July 2012 (PLANSPONSOREurope.com) – Aer Lingus says it anticipates significant losses were it to lose any legal challenge from unions involving responsibility for the deficit of the Irish Airlines Superannuation Scheme (IASS).
The group’s annual results reveal as at 30 June 2012, the Irish Airlines Superannuation Scheme (IASS) was estimated to have an actuarial deficit of approximately €727m on the statutory minimum funding standard basis. The IASS is currently undergoing its triennial actuarial valuation with the valuation expected to confirm that the scheme has a significant deficit. In the absence of additional funding commitments from Aer Lingus and the other sponsoring employers, the Trustees will be required to take measures to improve the scheme’s financial position. If such measures result in a reduction in member benefits, the group says, it is likely that there will be an adverse effect on employee relations which could lead to industrial disputes with its employees.
The group adds unions representing members of the IASS have conducted a ballot seeking a mandate for industrial action in the event that the pension scheme trustees are forced to reduce scheme benefits.
The report also acknowledges that the group’s position that it has no responsibility for the deficit in the scheme could be legally challenged by individual employees or deferred pensioners and “lengthy litigation” could ensue. It adds that if, contrary to the firm legal advice that the group has received, a court were to find against the group in any such litigation, significant or very significant loss could arise.