Staff at Aer Lingus have voted to accept proposals to address the €780m deficit in the pension scheme that they share with the Dublin Airport Authority and the Shannon Airport Authority.
The proposals hammered out over three years of negotiations will still see significant cuts in benefits for the 15,000 members of the scheme across the three companies.
Under the proposals, the trustees of the existing defined benefit scheme - the Irish Aviation Superannuation Scheme - will freeze it on 31 December.
They will use the remaining assets to purchase bonds to deliver funding for as much as possible of the benefits accrued to date.
In addition, Aer Lingus and the DAA will contribute cash lump sums of €146.7m and €57.3m respectively to kickstart new defined contribution schemes to provide future pension coverage for current employees.
Shares in the airline jumped in Dublin trade this afternoon.
The 5,000 IASS members who are already receiving pensions will see those pensions cut by 10% for those over €12,000 and by 20% for pensions over €54,000.
Their representative group has confirmed that they are contemplating legal action to challenge these cuts, which they say will result in a transfer of up to €165m away from retirees to fund better pensions for active employees.
Around 5,000 former employees who have not yet retired (known as deferred members) are also considering taking legal action on the grounds that they have been unfairly treated.
They note that like the retirees, they were not admitted to any of the negotiations at the Labour Relations Commission, the Labour Court or the expert panel as they had no standing as employees.
In addition, they argue that unlike the current workforce, they do not have "muscle" in the power to take industrial action.
They also argue that the lump sums set aside to offset some of the cuts for deferred members fall short of provisions made for active employees.
They note that a significant amount of the funding provided by the sponsoring companies to offset the €780m deficit is being applied outside the IASS, by being put into a new defined contribution scheme for active employees.
They argue that that funding should be split proportionately between current employees, deferred members and pensioners.
The margin of today's ballot was 1,031 in favour, with 436 against acceptance.
The new arrangements for Dublin Airport Authority and Shannon Airport Authority employees after the IASS is frozen at the end of December have not yet been finalised.
In a statement to the stock markets, Aer Lingus welcomed the outcome of the ballot.
The company acknowledged that the proposed solution was "challenging for all parties", but said it represented a compromise which was the only viable solution capable of acceptance by all sides.
Aer Lingus said that subject to the trustees of the pension scheme making the required application to the Pensions Authority, the company will issue a circular to shareholders in mid-November with details of the settlement.
The Aer Lingus board is expected to meet within the next 48 hours and to announce an extraordinary general meeting in mid-December seeking approval for once-off payments totalling €190.7m relating to the proposals.
The statement notes that if shareholders approve the proposal, the benefit reductions for members of the scheme proposed by the trustees will still need to be approved by the Pensions Authority before the proposed solution can be fully implemented.
Ballot result ends anxiety - IMPACT
IMPACT National Secretary Matt Staunton said the ballot result would bring an end to five years of anxiety and uncertainty for members of the scheme.
He said it would also end the sense of dread that there might be no pension for them when they retired.
Mr Staunton said the outcome had the potential to deliver a decent percentage of final pay for Aer Lingus workers when they retire.
IMPACT said that under the proposals, there will be lower future pension contributions for lower paid employees, while the employers' current pension contribution will double.
IMPACT represents cabin crew and middle managers at the airline.
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