Pensioners who worked at Aer Lingus, the Dublin Airport Authority and SR Technics are facing a cut in their pensions because of the pension levy.

The news is contained in a communication to all members from the trustees of the joint Irish Aviation Superannuation Scheme.

This handles pensions for employees in all three companies.

Trustee Brian Duncan said that because of the 0.6% a year deduction from the pension scheme, the trustees will have to make what he called "modest benefit reductions".

Pensioners will be advised in due course of how the cuts will be implemented.

Mr Duncan noted that between March 2011 and the end of 2011 the deficit in the IASS scheme rose from €343m to around €700m due to disappointing investment returns and lower interest rates in European countries.

While the deficit may have reduced slightly in the meantime, the position remains very volatile.

Talks are underway at the Labour Relations Commission in a bid to agree a strategy to address the deficit. The talks are crucial because the Government can not sell its stake in Aer Lingus until the deficit issue is addressed.

Mr Duncan said that current employer and employee contributions are not sufficient to fund benefits. He also informed members that employers have said that they will not pay additional contributions into the scheme.

Strategies to reduce the deficit include payment of additional contributions, cutting the benefits of those who are currently working and those who have left but deferred their pensions, and the purchase of sovereign annuities for pensioners.

Mr Duncan's document also raises the issue of co-ordination with the state pension. At present, staff in the scheme who stay till the normal retirement age do not cost the scheme the full price of their pension, as it is offset by the state pension.

However, those who leave early are entitled to both the full pension from the scheme, and the state pension on top. That has placed an additional burden or strain on the pension scheme.

The DAA pointed out that the operation of the pension scheme was a matter for the trustees of the scheme.

The head of human resources at Aer Lingus, Michael Greally, said the letter was welcome in that it clarified important issues regarding the pension scheme.