BA pensions row
22.06.09
British Airways has clashed with its pension trustees over a higher-risk investment strategy that it believes has exacerbated the deficit in its two main funds – now thought to top £3bn – the Telegraph reports. Keith Williams, the BA finance director, is reported to have told the trustees, chaired by Roger Maynard, that they should have followed the airline's advice two years ago and increased the funds exposure to bonds. BA has already warned that ‘it's unlikely the company can afford to pay more’ to plug the gap in the ballooning deficit on the two funds, and newspaper says that it is 'expected to play hardball with the trustees.'
In its full-year results last month BA warned that on an accounting basis the deficit in its two main pension funds is likely to have risen by £1.2bn to £2.9bn. However, its triennial actuarial review is expected to reveal an even worse picture this autumn. Then BA, which injected £800m into its pension schemes in 2006, is expected to come under pressure to increase its annual contributions from the current £320m a year. The Telegraph says that the airline is expected to resist, however, with Mr Williams complaining that the trustees should have done more to reduce exposure to volatile equity markets.
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