IRELAND - The Irish Aviation Authority has reduced the deficit on its defined benefit scheme by only €6.5m, despite additional cash contributions of more than €16m in 2007.

Figures from the IAA’s annual report for 2007 showed the scheme had assets valued at just over €314m at the end of December, leaving a scheme deficit of €56m compared to €62.4m at the end of 2006.

However, the figures showed total pension contributions for the year were €24.9m, of which €8.9m accounted for the current service costs, and just over €16m were cash contributions.

As a result, the IAA reported overall operating expenses had increased by 8.8% to €139.1m in 2007, of which more than 3.7% was a result of additional charges related to pension costs.

In the final report, Eamonn Brennan, chief executive of the IAA, confirmed the authority is “continuing to review the strategic management of the pension fund’s assets and liabilities and is in discussion with all relevant stakeholders”.

Discussions also include representatives from the Irish department of transport and department of finance, as the IAA is a commercial state-sponsored body, established to provide air traffic management and safety regulation of the Irish civil aviation industry.

However, Brennan revealed the IAA’s proposals to unions and staff representatives to “address the under-funding of the authority’s pension fund were strongly resisted, going as far as a refusal to refer the matter to the Labour Relations Commission”.

At present, pensions for all permanent employees are funded through a DB scheme, where the assets are vested in independent trustees, however in the final report Brennan confirmed the IAA is “taking steps” to implement a “separate defined benefit scheme for new entrants”,      

The existing scheme currently has approximately 860 members, and in recent negotiations over strike action by air traffic controllers the IAA noted the DB scheme is non-contributory for members, although the authority makes contributions of 31%.

In addition, the IAA stated in February members currently have the option to retire at 60 and receive half their salary as pension, in addition to a lump sum worth one and a half times their annual salary.
 
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