The Dublin Airport Authority chief executive Kevin Toland has urged staff to accept a proposal to resolve the massive deficit in their pension scheme.

He said if they refuse the proposal that they could lose cash and pension benefits worth up to €200m. 

Staff at Aer Lingus, the DAA and the Shannon Airport Authority are currently considering proposals by an Expert Panel to shut down their joint Irish Aviation Superannuation pension Scheme (IASS).

The plan is to replace it with separate schemes in each company. 

The IASS has a deficit of over €750m and the trustee has warned that without remedial action, members face drastic cuts in their benefits. 

Staff and management at Aer Lingus have signed a memorandum of understanding on arrangements and are preparing to ballot on the proposals. 

However, the two sides at the DAA have so far failed to reach agreement. 

In a letter to SIPTU representatives, Mr Toland points out that by the end of December, the Trustee of the IASS will commence cutting benefits and closing the scheme to further contributions or accrual of further service.

He said if staff do not agree to the new plan they will be in the "unenviable position" of having no effective means of mitigating the impact of the IASS trustee proposals to both cut and freeze accrued benefits.

He says that if agreement is reached, the DAA will make a total investment of €120m in the new scheme if its annual commitment to enhanced pension contributions and related income continuance is taken into account. 

He says around 2,600 staff will have access to the new scheme, under which the DAA will increase its employer contribution to the scheme. 

However, he warns that if the expert panel proposals are rejected, the trustees will proceed with their cuts.

Mr Toland said the company will not be making their contributions in mitigation, and no investment returns will be earned on those funds. 

He says staff will lose the DAA's total investment of €120m, as well as a further €70m from the benefit of future service.

The letter also states that if the proposals are rejected the financial implications of this additional risk crystallising are very significant."

He also confirmed that further engagement would take place regarding new retirement ages and fitness tests for airport police and fire service personnel.