BAA turns £250m deficit into surplus

BAA Airports pension scheme has moved into surplus after receiving a £26m boost from switching indexation measures.

The airport operator's full year results, published today, revealed a surplus of £38.7m on an IAS19 basis at the end of January - up from a deficit of £43.6m 12 months earlier and £255.6m the year before.

The firm said this was primarily due to employer contributions of £80m and the effects of using the Consumer Prices Index rather than the Retail Prices Index for uprating deferred member benefits - which improved the funding level by a further £26m.

It also announced that it had agreed a contribution schedule with the scheme trustees following the most recent triennial valuation - which reported a deficit of £275m as at September 2010 on an actuarial basis.

The group will pay £97m a year into the scheme from 2012 to 2014 including £24m aimed at eliminating the deficit over a period of 9 years. All but approximately £15 million of the new annual amount will be met by the group's airports.

BAA cut the deficit dramatically last year after contributing more than £100m raised through the sale of Gatwick Airport (PP Online, 22 February 2011).