BA ‘could close pension scheme to current members’
05.06.09
British Airways has not ruled out following Barclays lead and closing its final salary pension scheme to its 100,000 existing members, the Telegraph reports. The airline said yesterday that all options to tackle its pension deficit would be reviewed at the completion of the current triennial actuarial review. Early conclusions from the review, which began in April, are expected in September.
BA estimated at the time of its full-year results last month that, on an accounting basis, its two final salary schemes – the Airways Pension Scheme and the New Airways Pension Scheme – had a £2.9bn deficit, up £1.2bn from previous estimates. The airline is currently contributing around £320m a year to the two schemes – a sum that has grown with the fall in equity markets.
Asked if BA could follow Barclays and close its scheme to existing members, a spokesman for the airline told the newspaper: ‘When the actuarial review is completed, we will have discussions with the trustees on how the schemes should be funded in the light of the valuation findings. We will explore all options as part of a funding review.’ He stressed that closing the scheme was not under active consideration, saying: ‘It is premature to suggest that we would go down any particular route.’
BA closed its final salary scheme to new members in 2003. While closing the scheme to existing members would remove a major millstone, any move would risk a bruising confrontation with the workforce. Most of the 30,000 people in the APS are retired but around half of the 70,000 in NAPS still work for the airline.
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