IBOA slams AIB's latest attack on staff pensions, pay and benefits

Issued : 14 June 2012

IBOA The Finance Union has rejected proposals from AIB's senior management to close down its employees' Defined Benefit pension scheme and to extend the ongoing pay freeze for ordinary staff until the end of 2014.

Union General Secretary, Larry Broderick, said that in view of the substantial savings AIB had already made on staff costs through the reduction in staff numbers that had already taken place since 2008 and with even greater savings anticipated in future through the implementation of a major restructuring programme, the Bank's attempt to further undermine the overall remuneration of its ordinary staff was totally unacceptable.

"The move on the Defined Benefit pension scheme would produce relatively modest cost savings for the Bank - but would have a significant impact on the retirement income of many ordinary bank officials," he said. "It would be particularly distressing for staff who have recently agreed to major changes in the scheme involving reduced benefits and increased contributions.

"As for the proposal to freeze pay until the end of 2014, our members throughout AIB Group have already endured a pay freeze since 2009. Indeed some of our members have even been denied contractual payments - such as increments and performance awards - and unlawfully so, in the view of recent industrial tribunals in London and Belfast.

"At the same time, it has been revealed that senior executives in AIB Group have been in receipt of substantial bonuses during this period, that a tiny minority of selected staff have received top-up awards known as retention payments and that the Bank has also engaged an army of consultants costing many millions," he said.

"If implemented, the Bank's latest proposals would further erode our members' living standards at a time when AIB staff are being asked to make even more sacrifices in the most far-reaching restructure in the Bank's history. Around 2,000 men and women have already left AIB since 2008 as a result of the non-replacement of retiring employees and the non-renewal of temporary staff. The Bank has also recently announced its intention to seek a further 2,500 job reductions over the next two years.

"In case we forget, all of these extraordinary measures have been necessary because of the reckless mismanagement of the Bank by its former senior executives," the IBOA leader declared.

"It is unacceptable that the Bank should ask those staff who will remain with the Bank - and on whose shoulders the recovery of AIB ultimately depends - to contemplate even more sacrifices at this time. An enlightened management would recognise the importance of motivating staff in a positive fashion to restore AIB to sound financial health in the interests of all its stakeholders. An enlightened majority shareholder - the Irish State - would also see the value in such an approach for the public good.

"The Chief Executive, Mr. David Duffy, has committed to engage with IBOA on these and other issues - including the Bank's future plans. IBOA is prepared to enter these talks in an effort to ensure that our members' concerns are fully understood. However, we believe that AIB's senior management should reconsider its position - taking due account of the major contribution its employees have already made. Such a rethink by the Bank would ultimately benefit all of AIB's stake-holders, including customers," said Mr. Broderick.