IRELAND - The Irish Airlines (General Employees) Superannuation Scheme - the joint pension scheme for workers at Aer Lingus, Dublin Airport Authority and former employees of SR Technics - may have to be split as part of arrangements to plug the €500m deficit in the scheme.

The pension fund has been in talks between staff representatives and the companies that have explored the possibility of splitting the fund into three separate schemes.

Scheme members have been informed the fund does not meet the minimum funding standards sets by the Pensions Board and that it had until 1 November to make recovery proposals.

Brian Duncan, chairman of the board of trustees, wrote to members: "The employers are aware the current benefits under the scheme cannot be maintained without increased funding, and if increased funding is not available, then benefit changes will be required."

He added that if funding proposals were not given to the Pensions Board by November, the scheme might have to reduce benefits for deferred members.

In other news, Irish pension managed funds delivered positive returns during September, with an average return of 1.7%, according to Rubicon Investment Consulting.

Canada Life/Setanta took the top spot, with a return of 2.6%, while Merrion Investment Managers propped up the league table with a 1% return.

Over the third quarter, the average fund returned 3.1%, as managed funds gained ground in two of the three months, Rubicon said.

Canada Life/Setanta and Standard Life Investments had the best performing funds over the quarter, returning 4.5%, while Merrion Investment Managers had the worst performing fund, returning 1.9%.

Rubicon said the average managed fund return had been a "very disappointing" loss of 7.1% per year over the last three years.

The five-year returns to the end of September were also mostly negative, with an average loss of 0.8% per year.

Irish group pension managed fund returns over the last 10 years have been just 0.2% a year on average, well below the Irish inflation rate of 2.4%.

"Indeed," the consultancy added, "none of the managed funds surveyed outperformed inflation over this period, while four of the 10 funds failed to deliver positive returns over 10 years."
 

Topics