IASS PENSION UPDATE
Update February 6th 2015:
A summary, prepared by the Aer Lingus actuary, of the Additional Voluntary Contributions (AVCs) required by reference to annual pensionable salary for members earning between €39,000 and €50,000 is now available. The figures indicate the amount required to be inserted in the AVC form to maintain contributions to reach the targeted percentage of Final Pensionable Pay in your personal illustration.
You can read the chart supplied HERE.
Update February 3rd 2015:
Since 1 January last Aer Lingus has commenced the collective agreement we voted upon last year and ceased deductions into the IASS, instead commencing them for the new DC scheme. The Aer Lingus contribution is 10% of pensionable salary and the default employee contribution is 6.375%. The contributions to the supplementary scheme (Aer Lingus 4% / employee 2%) also ceased.
(For future reference I attach a copy of the agreement HERE.)
Additional voluntary contributions for members on annual income over €37,000
Page 11 of the agreement refers. It’s important to note that the actuarial assumptions made to reach the targets for members in these income ranges were adjusted by the expert panel as part of the agreement as follows;
“A change in the assumed rate of employee contribution to the DCS required to meet Labour Court targets. The actuarial advisors to both Aer Lingus and the unions previously assumed an employee contribution of 8.0% in all cases as the basis for the expected achievement of the Labour Court recommended targets. The Expert Panel adjusted this as follows:
Staff whose annual pensionable pay is €37,999 or below
Staff whose Annual Pensionable pay is between €38,000 and €49,999
6.375% for the first €37,500 and 8.000% on balance
Staff whose Annual Pensionable pay is €50,000
8.000% subject to step up arrangements to avoid anomalies
I am aware that you have received an AVC form in recent days and, if you are in these pay categories, and you want to be absolutely sure of meeting these targets, then you should indicate this.
I note from the form that if you earn €50,000 or above this is simply a matter of inserting the figure of 1.625% in the box. I have spoken today to Brian Bowden of Aer Lingus and made it clear that this will not be possible for members in the pay category of €38,000 and €49,000. He has agreed to consult with the pension helpdesk and to come back to me promptly with a solution for this and I will send out another update. In relation to Additional Voluntary Contributions (AVCs) generally it is possible for any of you to contribute more up to the Revenue Commissioners limits. I attach for your information a copy of Revenue’s own guidelines on percentage limits.
National Retirement Age Increase
You will recall my e-mail bulletin of 28th October last where I stated;
“Last week, at the information meetings held at the three airports, unions discussed the implications of changes to the state pension age. It should be noted that, following Government decisions, the age at which the state old age pension is payable is increasing to 67 (in 2021) and then to 68 in 2028. This is an issue will affect every single worker in every workplace in the country. It would have been an issue for Aer Lingus workers regardless of the pension proposals currently under ballot.
The ICTU Trade Union group has put Aer Lingus on notice to expect a claim to resolve this. We have time to deal with this issue separately.
I just wish to confirm that this has been followed up and I attach a copy of the group of unions claim against Aer Lingus sent by Liam Berney of ICTU on 12 December last.
Supplementary Scheme 2
I have been in contact with the trustees of that scheme who are actively working towards a wind-up of that scheme in 2015, with most likely a tax friendly transfer of your share into your DC pension fund. I am aware that this scheme is in good shape and has your share of the start up capital of €34 million, your contributions and the Aer Lingus contributions. The trustees are working towards the resolution of this.
From e-mail bulletin dated 28th October:
“Further to my last bulletin (Saturday 25th) more information is now available concerning the waiver. You can read the full waiver papers (a letter from Aer Lingus and a signed explanation), which includes the input of a firm of solicitors, Eversheds O’Donnell Sweeney (known as ‘Eversheds’), acting on behalf of the ICTU Trade Union group. Aer Lingus, in the event of an agreement, will require each individual to sign a wavier in order to receive the capital sum, and to receive the additional cash payment (€400) recommended by the Expert Panel.
The waiver records your agreement that you accept the proposals and that they represent full and final settlement of the current dispute relating to pension. It has nothing to do with your future pension arrangements (other than the reductions to your IASS benefits that this proposal is about), nor any of your other terms and conditions of employment.”
Documents referred to HERE and HERE for your information. The waiver has nothing to do with the DC pension scheme for future service and relates solely to the agreement you voted upon last November. It therefore serves no one to delay signing this and thus transferring the amount of money that is yours into your DC pension fund where it can at least commence to gain interest. It’s doing nothing for you if you have not signed and returned it.
Trustee board new DC scheme
An earlier delay is now resolved and the trustees are now finally meeting and receiving training and commencing making the decisions on the scheme to ensure it results in decent pensions for our members.
All IASS and Aer Lingus DC pension e-mail bulletins to date are available here: