UK - British Airways has denied its staff may be asked to increase contributions, accept lower pay outs or take cash incentives or pay rises in return for opting out of its final salary scheme.
Responding to reports that these were among a number of options on the table in a bid to tackle its £1.4bn pension deficit, BA insisted it is simply starting a three-month consultation with its employees.
A spokesperson for BA said: “We are starting an exhaustive consultation so we take all our staff through the pensions issues, not just for BA but for Britain.
“We are taking staff through the implications of the deficit and the fact that it’s likely to grow particularly with increasing mortality rates and falling long term interest rates which have an impact.”
The airline is keen to convey that its £1.4bn pensions deficit, one of the largest in the FTSE100, is solely related to the ageing NAPS (New Airways Pension Scheme) and not the recent defined contribution scheme which opened two years ago.
BA will also discuss issues regarding the Pension Protection Fund and the powers of the Pensions Regulator to explain to staff the size and scale of the challenge ahead. It confirmed that after almost doubling its contributions to £225m last year it will not be able to afford increasing pension contributions.
BA has hired Hewitt Associates to advise on its plans and the pension trustees have kept Watson Wyatt as an advisor.
From this week staff belonging to the NAPS pension scheme will also receive information explaining the problems and the reasons for the growing shortfall. Once the discussions have been completed the airline will meet with the pension trustees and trade unions to discuss possible solutions to be fed back to staff in spring 2006.
Chief financial officer John Rishton (pictured) said: “The issue is quite simply, how can we secure our NAPS pension without jeopardising the future of the company.”
The Pensions Regulator (TPR) and Labour MP Stephen Kinnock and will listen to the experiences of steelworkers when transferring their pensions away from the British Steel Pension Scheme (BSPS) next week in Port Talbot.
Just Group has acquired a 75% stake in the holding company of Corinthian Pension Consulting in a bid to strengthen its professional defined benefit (DB) advisory services.
The Pensions Regulator (TPR) has exercised its production order power under the Proceeds of Crime Act 2002 for the very first time as part of a fraud investigation.
The ITN Limited Pension Scheme has named Trafalgar House as its administrator for an initial term of five years.