Ryanair is closing one of its staff pension funds in a €12.5 million deal that involves the airline fully covering the scheme's deficit.
The company confirmed it was winding up its defined-benefit pension scheme after agreeing with the trustees to fully fund its €9.7 million deficit and pay a top-up of €2.8 million.
Just 121 of the airline’s 9,000 employees pay into the scheme, which pays pensions tied to final salary. It supports 20 pensioners and it has 200 deferred members – staff who have left Ryanair but have yet to retire and begin collecting their pensions.
Under the deal’s terms, the 121 active and 200 deferred members can transfer their benefits to the company’s defined-contribution plan, under which investment returns determine the final pension. The airline will purchase annuities to continue paying the existing 20 pensioners.
Ryanair and the scheme's trustees agreed terms on December 30th. Chief financial officer Howard Millar said the company had eliminated pension liabilities from its balance sheet.
“This is in marked contrast to many of our competitor airlines, whose pension schemes are running enormous deficits, in excess of hundreds of millions or billions,” he said.
The airline is the biggest shareholder in Aer Lingus, which is working to find a solution to the €780 million deficit in the Irish Aviation Staff Superannuation scheme that it operates jointly with Dublin Airport Authority.
It opposes a Labour Court recommendation that involves Aer Lingus contributing €110 million to a new fund for that scheme's active members and €50 million for its deferred pensioners.
