Defined Benefit Pension Schemes – IASS Litigation
Pensions are becoming a frequently present topic in the media as former employees find their pensions are worth less than they were told they would be.
Augustus Cullen Law is currently pursuing claims for compensation for Deferred Members of the Irish Airlines Superannuation Scheme (IASS) pension scheme against the State and a number of different companies. Our clients include former staff from SR Technics, Aer Lingus and the DAA.
The recent decision of Independent News and Media to cut their current and former workers’ pension entitlements by up to 80%, in some cases, is a scenario that has arisen in other schemes recently, and a reduction in benefits looks set to continue in the future with other schemes. Almost half of the largest defined benefit schemes registered with the Pensions authority in Ireland do not meet the Minimum Funding standard.
A defined benefit pension scheme is a pension plan whereby an employer commits to a specified pension payout when the employee retires.
Our clients involved with the IASS pension scheme are faced with a similar situation to those members of the Independent News and Media pension scheme. The pension schemes these people belong to are separate legal entities to the company and are run by trustees. In the UK, the regulator who oversees pensions is able to hold a company accountable for deficits in its pension scheme, but the Pensions Authority in Ireland does not have the same power.
The IASS scheme was set up in 1954 and it was registered with the Pensions Authority as a defined benefit scheme on 21st. March 1992. There are three trustees, made up of a professional Trustee who is Chairman and one representative each from the Employers and Employees.
The Pensions Authority confirmed in 2003 that the scheme is a defined benefit scheme for the purposes of the 1990 act. As of the 31 June 2014 there were 14,100 members of the IASS. This figure included 5500 deferred pension holders.
From around 2001, Aer Lingus and the DAA offered incentive packages to staff to take voluntary redundancy. This policy was actively pursued and improved terms were offered in November 2008.
The policy continued in 2009 when a general background note outlining answers to FAQs was part of the correspondence designed to persuade staff to leave early.
By the end of 2012 it was very clear that the entitlements offered and accepted by the employees would not be met and there were many warnings signs present several years prior to this.
In 2011 the employers submitted a proposal to have the benefits co-ordinate with the state pension and this in itself resulted in a significant loss for deferred members. One letter simply stated the amount of the full un-coordinated pension to be paid. No concrete action was taken to amend the IASS Scheme until 2014.
The action taken in 2014, enabled by the passing of the State Airports (Shannon Group) Act 2014 was to remove co-ordination, revaluation entitlements on top of other previous cuts which undermined the deferred pensioners’ rights rather than underpinning them. The act itself gave new powers to the Trustees in order for them to implement the cuts.
We are arguing that by virtue of the contracts of employment, severance agreements and representations made by the company, the rules of the scheme, and the Constitutional rights of the deferred members of the scheme among several other legal protections, that the employers illegitimately changed the rules of the scheme to cut deferred pensioners benefits, in many cases by over 60%.
If you have had your pension unfairly cut, and wish for us to investigate your case, or if you require further information, please contact Gus Cullen, Head of General Litigation.
14 December 2016
