Allied Irish Banks (AIB) has written to its former senior executives to request they voluntarily reduce their pensions as part of its plans to lower its defined benefit (DB) pension scheme deficit.
The bank first announced its plans in the AIB 2012 Half yearly financial report, which was published on 31 August 2012.
The DB pension scheme deficit, according to the report, was €1,457 million at 30 June 2012, up from €763 million at 31 December 2011.
The plans, which aim for an annual cost reduction of €200 million, also include:
- The closure of the DB scheme to future accrual before the end of 2012.
- Transferring its DB members into its defined contribution (DC) pension scheme.
- Early retirement and voluntary redundancy to reduce its number of staff by at least 2,500 by 2014.
- Proposed changes to staff pay and benefits, including pay cuts at senior levels.
David Duffy, chief executive officer at AIB, said: “As part of AIB’s return to viability, the bank is seeking to materially reduce its cost base.
“On our overall pension scheme, we have moved to eliminate future accrual under the defined benefit pension schemes in Ireland and the UK, and to transfer all employees in the defined benefit or hybrid pension schemes to defined contribution by the end of 2012.
“Separately, we have written to former senior executives of the bank requesting a voluntary reduction in pensions and this process is ongoing.”