annual report 2009 - Aer Lingus

Financial Statements Aer Lingus Group Plc – Annual Report 20098728 Employee participationEmployee share ownership plan (“ESOP”)Aer Lingus ESOP Trustee Limited (“ESOT”) acts as the sole trustee of the Aer Lingus Employee Share Ownership Plan (“ESOP”). TheESOP was established by a Trust Deed executed on 28 April 2003. Through a combination of an issue of shares to ESOT, the purchase ofshares under an option granted at the time of the IPO, and its position as trustee of shares held by staff under an Approved Profit SharingScheme (“APSS”), ESOT held 12.47% of the issued share capital of the Company at 31 December 2009 (31 December 2008: 12.47%).ESOT is also trustee of the Aer Lingus Approved Profit Sharing Scheme and, at 31 December 2009, 9,188,781 shares (1.72%) (31 December2008: 9,397,900 shares (1.76%)) were held in the Company on behalf of beneficiaries. Certain of these shares are subject to a minimumholding period requirement specified by the Irish Revenue Commissioners.Profit sharing schemeAt the time of the IPO a new profit sharing scheme was established whereby the Group agreed to transfer to ESOT, depending on the returnon average shareholders’ funds, between 0% and 7.5% of the Group profit before taxation and exceptional items annually, commencingon 1 January 2006. The profit share is to be used by ESOT to pay any expenses and to repay all borrowings arising from the exercise ofthe option granted at the time of the IPO. No profit share was payable for 2009 or 2008 as a result of the losses incurred in those years.29 Pensions and other post employment benefitsThe Group operates a number of externally funded pension schemes for the majority of its employees. The Irish Pension Schemes meetthe definition of defined benefit schemes under the terms of the Pensions Act 1990 (but are defined contribution schemes for accountingpurposes). One of the Irish Pension Schemes, the Irish Airline (General Employees) Superannuation Scheme (the “Main Scheme”) isoperated in conjunction with a number of other employers.The Group and employees contribute a fixed percentage of salaries each year to these schemes, which does not vary accordingto the funding level of the Irish Pension Schemes.The rules of the Irish Pension Schemes provide for the following in the event that there is an actuarial surplus or deficiency in the schemes:SurplusIf an actuarial valuation discloses a surplus, it shall be applied by the trustees, after consultation with the Actuary, for the purposeof increasing the benefits to members or reducing the rate of contribution by the employers and/or members.DeficiencyIf an actuarial valuation discloses a deficiency, the trustees shall take such measures as they think appropriate, having regard to therecommendations of the actuary, to remedy any such actual or anticipated deficiency provided that no such measures shall, withoutthe consent of the employers, make provision for payment of any increased contribution by the employers, or, without the consentof the members, make provision for the payment of any increased contribution by the members.The costs and liabilities of the schemes are assessed in accordance with the advice of a professionally qualified actuary. The mostrecent actuarial review was carried out at 31 March 2009.The Group’s contributions charged for the year were €24.9m (2008: €29.3m), based on rates specified by the schemes’ rules.The actuarial reports are not available for public inspection.At the time of the IPO, the Group reached agreement with the trade unions representing the majority of staff to establish two supplementalfunds. The purpose of the supplemental funds is to seek to provide, insofar as available funds permit and subject to their trustees’ discretion,increases to pensions in payment for those members of the Main Scheme who are also participants in the supplemental funds wherethe trustees of the Main Scheme do not grant increases to pensions in payment in line with rises in the Consumer Price Index.The Group and current eligible employees who have opted to become members of the funds pay ongoing annual contributions.As is the case with the Main Scheme, the two supplemental funds were established on the basis that neither the Group nor aparticipating employee can be obliged to pay more than the specified contribution to the funds without their written consent and,therefore, are accounted for as defined contribution schemes.