Thousands of AIB bank staff in Ireland could be in line for improved pensions under a recommendation from the Labour Relations Commission's head of conciliation Kevin Foley.
He says the bank should introduce a new pension scheme so that staff would have a guaranteed minimum pension when they retire.
If accepted by AIB, the new pension arrangement would reverse the bank's previous strategy of replacing fully guaranteed schemes with pension plans where employees carry the risk.
Up to 1996, all AIB staff were in a defined benefit pension scheme - guaranteeing a proportion of their final salary on retirement. But staff joining since then were offered only a defined contribution scheme - carrying greater risk for the employee if financial markets do not perform.
Kevin Foley recommends that AIB set up a hybrid or mixed scheme from December 1. Salary up to €62,000 will be covered by a defined benefit scheme - providing a guaranteed pensions safety net.
Pay above that level will be covered by a defined contribution scheme - with the bank contributing 10% , and the employee 5% of pensionable salary. The original defined benefit scheme for older staff will not be affected.
The bank may alter the terms of the new scheme in the event of any significant threat to its financial position. The Irish Bank Officials Association has welcomed the recommendation and called on the board of AIB to accept it. It is understood the board of AIB will consider the recommendation at its next meeting on May 24.
This recommendation will be closely analysed by both employers and unions nationwide. If accepted by AIB, it would represent a significant reversal - by one of Ireland's main employers - of the international trend away from guaranteed schemes.
