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Aviation authority's staff asked to shore up pension
CIARΑN HANCOCK, Business Affairs Correspondent
THE IRISH Aviation Authority will ask its workers to make a contribution of about 8.8 per cent to their defined benefit pension scheme to help shore up a massive deficit.
This decision was made by the company's management yesterday following an extraordinary general meeting convened to look at ways of addressing a 146.6 million deficit in the pension scheme.
The authority also wants to link increases in pensioner pay to inflation rather than to wage rises given to staff members.
The meeting was held in parallel with the publication of the authority's annual report, which showed that the pension deficit ballooned last year by 90.6 million from a level of 56 million in 2007.
This reflected the collapse of equity markets worldwide.
The authority makes a 30.5 per cent contribution on behalf of staff, who pay 1.5 per cent of their pay to the pension.
Authority chief executive Eamonn Brennan said this was no longer sustainable and said it would seek to engage with trade union Impact to reach a new deal.
"We have got to address this with the department of transport and the unions," Mr Brennan told The Irish Times yesterday. "The reality is that the pension fund is insolvent."
Mr Brennan said he wanted to tackle the pension deficit over the next three to five years. "This is not going to go away," he added.
Mr Brennan said he would be willing to pay the pension contribution himself. The authority made a contribution of 96,000 on behalf of Mr Brennan last year as part of a total remuneration of 412,000.
This compared with total pay in 2007 of 350,000. Mr Brennan's basic pay rose last year by 22 per cent to 253,000.
Mr Brennan recently agreed to take a 10 per cent cut in his basic pay. He told The Irish Times that his bonus this year would be about one-third less than the 63,000 he earned last year.
The authority is seeking to defer payment of the latest national wage agreement for two years. Its profits declined by 16.7 per cent last year to 12.2 million despite an 8 per cent rise in turnover to 166.7 million. The volume of air traffic movement was flat in 2008.
Mr Brennan said this year would signal a steeper decline in profits.
In a further sign of recessionary times the crash has seen helicopter ownership collapse over the past year.
Once a powerful status symbol in the years of the Celtic Tiger, property developers and the rich and famous are now frantically offloading their helicopters. At the end of April 2009, there were 144 helicopters registered on the books of the authority compared with 162 in the early part of 2007.