British Airways reaches agreement with unions to reduce its GBP3.7 billion pound pension deficit
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.