GLOBAL - British Airways have confirmed any decision to close its final salary pension scheme would cost the company more than double its current pension deficit.
Willie Walsh, BA chief executive, said closing the final salary scheme to existing members to cover its £1.4bn pension hole did not “feel like the right solution”.
But a BA spokesman stressed the company had not yet made any conclusive decisions on the pensions deficit, as talks regarding possible solutions continued from October last year. He did however confirm it was “unlikely” the scheme would be closed.
Should they decide to do so, it would crystallise the deficit, resulting in an estimated £3bn cost - more than double the current pension deficit, the spokesman said.
“The fact of the matter is no single solution has been reached or presented to the pension members at this stage. What we have done is begun an education and communication procedure to staff and members of the pension scheme in question, and that is still ongoing,” he said.
The next stage will see BA meeting with unions and trustees to discuss a solution that could then be presented to staff. “On that basis, it is slightly misleading to say any kind of solution there that has taken any other possible answers out of the equation,” said the spokesman.
As part of its communication process, BA has considered options taken by other companies. “The main thing to stress is that (chief executive) Walsh wants it to be a lasting solution, whereas a lot of the options other companies have taken have proven to be a bandage on their deficit. That is not what we are looking to do, want an alternate, lasting solution,” he said.
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