Background:

The RASA Pension Sub Committee continue to be very active on behalf of R.A.S.A. members in pursuing pension issues with employers, trustees, politicians and others.

Amongst others some recent issues being addressed are:

• Representation to Government and other stakeholders regarding the non protection of our pensions in payment by means of legislation changes to the priority order and their lack of understanding of the impact of a 'blunt flat % cut.

• Permanent reduction in pensions following the Stamp Duty (Pension Levy) Tax

• Underfunding of the main scheme - Irish Airlines (GE) Superannuation Scheme (IASS)

• The employers’ persistent refusal to recognise that the IASS is a Final Salary Scheme with defined benefit based on pensionable years of service and ignoring Pension legislation that defines as such.

Defined Benefit Scheme: Following an application in 2003 to the Pensions Board [subsequently renamed The Pensions Authority in 2014] under a number of Sections within Pensions Act 1993-2003 by IMPACT Trade Union regarding whether the IASS pension scheme is a Defined Benefit Scheme or Defined Contribution the Pensions Board issued a Determination on 4th September 2003 ...that the Irish Airlines (General Employees) Superannuation Scheme must be considered a defined benefit scheme for the purposes of Section 2 and the other sections of the Act* see attachment

Note: the Annual Reports of the main sponsoring employer reports on the IASS pension scheme under the section headed 'Defined Contribution Pension Schemes.

• for further details on activities relating to pension cuts and other activities click on side bar.

Cost of Living Adjustment(COLA) - Inflation (CPI):

• Freezing of post retirement increases to pensioners from IASS pension fund since 2007 - .

• CUT in pension payment and benefits to address the MFS deficit include removing pension increases which provides some alleviation towards inflation. It is proposed that there will be no benefit to cover inflation in the IASS pension scheme. RASA considers this is a further reduction in benefit for IASS pensioners.

• In circumstances 'where IASS fails to pay cost of living increases' was provided for when two Aer Lingus Supplementary Funds were set up as part of the Aer Lingus 2006 IPO for the purpose of paying the annual cost of living increases.

• The amount of funds allocated to the Aer Lingus First Supplementary Fund under the IPO by the employer to provide for the cost of living increases is now insufficient. This fund, effective from January 2007, has only paid out one year's cost of living increase in the eight year period since set up and this payment was delayed for nine months. Originally this fund was set up for pensioners (pensions in payment) but later changed to cover pre January 2007 pensionable service of all Aer Lingus members of IASS - active, deferred/dormant, pensioners.

• Actuarial Review as at 31 March 2014: The First Aer Lingus Supplementary Fund is stated to be incapable of paying cost of living increases according to the Schemes actuary based on actuarial assumptions in circumstances 'where IASS fails to pay' beyond approximately 23% of price inflation inclusive of credit for years of negative inflation. No actuarial report received since then to reflect the imposed changes in the IASS Defined Benefit pension scheme.

• The Aer Lingus Second Supplementary Fund also set up under the IPO to provide price inflation in respect of post January 2007 pensionable service when IASS fails to do so has only paid three years CPI. Payment in respect of 2012/2013 CPI due in April 2013 was again delayed for 12 months and paid in March 2014 at year end rather than throughout the year. No further CPI payments made since then.

• Contributions to this fund have now ceased when the employers proposal to reduce benefits and freeze contributions to the IASS were implemented on December 31 2014. This puts a cap on the number of potential pensionable years service in this scheme. To January 2015 cumulative post January 2007 pensionable service is 8 years. There are significant assets in this fund which include the initial funding from the IPO.

• During Aer Lingus and Trade Unions communication roadshows in October 2014 both employers and trade unions proposed that the Second Supplementary Fund be wound up and in 2015. RASA and pensioners excluded from these roadshows.

• In end January/early February 2017 members of the Aer Lingus Second Supplementary Fund were informed that Aer Lingus and the trustee had wound up this fund in December 2016.

• Even though commitments were made there has been no payment for CPI increases from funds outside the IASS scheme for all other pensioners former employers.

• However in May 2017 UK pensioners received their arrears of CPI due from IASS after years of advocacy on their behalf.

• July 2017 RASA News – Aer Lingus IASS First Supplementary Scheme

• RASA has been contacted by some IASS Pensioners who have received a letter “issued for and on behalf of AL First Scheme Trustees Limited” which refers to them “currently receiving payments to which they are not entitled” … “due to an historic administrative error”. RASA has had sight of one of these letters which concludes “The Trustee sincerely regrets having to write this letter and for any inconvenience caused. If you have any queries in relation to this letter please contact the Mercer Pension Payroll helpline number +353 (0)1 526 8444 and a member of the payroll team will be available to assist.”

• RASA understands that the advice being given to those who phone Mercer is to write to the Paul Kelly, Trustee, The First Aer Lingus Supplementary Pension Scheme, Services Annexe, Aer Lingus Head Office, Dublin Airport, Co Dublin.

• RASA had no correspondence from the Trustee indicating the intention to issue such letters and is gathering information to form a position on the developing situation with a view to advising members of what action to take. In the meantime following Mercer’s advice is appropriate.

• RASA is still awaiting a response to correspondence to the Trustees of both the First and Second Supplementary Funds regarding a meeting.

July 2017

RASA - Pensions Sub Committee

Sub Committee Members are drawn from RASA Executive and the general membership: P Kilduff (Secretary)