IRELAND - Airline Aer Lingus has bowed to continued pressure from employees and unions and agreed to make a one-off payment into its pension fund ahead of its new IPO.
The airline, which is planning to float on the Dublin and London stock exchanges by the end of September, is reported to have plans to hand over around €100m in a goodwill gesture aimed at placating employees and SIPTU union members, who have expressed anger at the proposed IPO.
The money will be used to fill some of the company's pension fund deficit, estimated at around €330m and the source of continual dispute between the company, which denies legal responsibility for the shortfall.
Aer Lingus plans to use the money raised by its IPO to secure and fund the expansion of its business and - said a statement issued by Martin Cullen (pictured), Irish minister for transport - to address "the concerns of the Aer Lingus trade unions and workers arising from the funding position of the company's main pension scheme".
Referring to the pension issue and the opposition to the flotation, Cullen in July expressed confidence that "the process now underway between company and unions will come to a satisfactory conclusion soon".
However, in a press release issued by SIPTU at the end of August, national industry secretary Michael Halpenny said: “This is a bad value proposition and a bad call. It will do nothing for the employees, the customer or the taxpayer. In summary, there could hardly be a worse time for such an ill-conceived plan.”
Most respondents in this week's Pensions Buzz do not think businesses should be able suspend AE contributions if in financial distress.
Former BHS owner Dominic Chappell has lost the appeal against his section 72 conviction and sentence for failing to hand over information to The Pensions Regulator (TPR).
This week's top stories include Marsh and McLennan Companies agreeing to buy JLT, and the home secretary calling for AE to be scrapped in a no-deal Brexit scenario.
Lesley Titcomb says the watchdog wants closer interactions with pension funds to spot problems sooner and act before having to use its more stringent powers