British Airways reached an agreement with trade unions to reduce its GBP3.7 billion pension deficit, to avoid the closure of the schemes (Bloomberg/Dow Jones/Sky News, 16-Mar-2010). The carrier stated the deal will allow it to keep its two pension plans open for current employees and freeze payments at GBP330 million p/a over 20 years. Staff will now be asked to vote on the deal, to be recommended by unions. BA pension trustees will also need to approve the agreement by 30-Jun-2010. The move brings it a step closer to its merger with Iberia, after Iberia requested the issue be dealt with before a final agreement can be signed. The pension agreement is separate to BA’s strike issues.
- New Airways Pension Scheme (NAP) pension programme: Members are now able to decide whether to lower future benefits, to keep payments at current levels, or contribute an additional 4.5% to maintain current benefits. It is the second time in three years members have been asked to agree to value cuts;
- APS: Terms are to be frozen, with the situation to be reviewed at the next valuation of the deficit.