UK - British Airways received a £396m credit due to changes in the New Airways Pension Scheme according to its annual report, released today.
Under new IAS 19 accounting rules, pensionable pay was capped at the Retail Price Index resulting in the credit.
BA CEO Willie Walsh commented: “We have addressed the £2.1bn (US$4.1bn) pension deficit and disposed of the loss-making regional business, BA Connect.”
A BA spokesman confirmed that although there were plans to pay £800m into the debt-stricken fund, the full amount had not yet been credited.
Under terms agreed with the union, £800m is to be paid into the fund over the year following negotiations termed “difficult, lengthy and complex” by the T&G.
Overall operating profit fell for the year ending 31 March 2007 to £602m (US$1.1bn) from £694m (US$1.3bn) in 2006.
Net debt fell from £650m to £991 since the start of the financial year. This took into account the cash injection to the pension scheme.
A number of pension schemes have been prompted to lock in gains with a move into bonds after the estimated deficit across FTSE 100 DB pension schemes improved by £36bn, over the 12 months ending 30 June last year, JLT Employment Benefits found.
HM Treasury has agreed in principle to give NEST a £329m contingent liability guarantee in the event of the master trust's wind up or closure.
AMP Capital has set up a dedicated team to help institutional investors, including pension funds, invest in infrastructure through direct equity allocations.