AIB pay proposals referred to LRC

AIB employees have rejected a series of proposed changes in pay and pension entitlements and their union has referred the matter to third party mediators.

Their union, the Irish Bank Officials Association (IBOA), said the bank’s proposals including a two-year pay freeze, a 5 per cent contribution from staff on a defined benefit pension and changes in the calculation of pension entitlements had been rejected.

The existing defined benefit pension scheme in the bank guarantees staff two-thirds of their final salary as a pension upon retirement.

Because the union represents staff in the Republic, the North and Britain it is contacting the Labour Relations Commission, ACAS and the Labour Relations Agency to secure dates for the issues to be heard.

“The outcome of the ballot reflects the deep sense of upset and anger among staff at the Bank’s opportunistic proposals,” said IBOA general secretary, Larry Broderick, said in a statement.

“In light if this morning’s announcement that the Bank is seeking to buttress its capital position still more, we would urge management to recognise the important role that the bank’s staff have played in extremely difficult circumstances.”

The bank planned to introduce the contribution to make up a large - but unspecified - shortfall in its pension funds which have been hit by the global financial crisis.

An AIB spokesman said the bank was engaged in an ongoing process with the IBOA and would continue to negotiate. He declined to specify the size of the pension deficit.

The bank employs 11,000 people in the Republic, 4,500 of which are members of the defined benefit scheme.