UK - The Transport and General Workers union (T&G) has accused British Airways of thrusting the £1bn pension deficit burden onto staff and pledged to resist the changes in pension benefits for its members.
The airline today put forward its proposals to staff in a bid to tackle the deficit, in which it would keep a final salary scheme with no changes to pension benefits already earned and no increase in staff contributions.
BA’s proposal also included increasing retirement age from 55 to 60 for pilots and 65 for cabin crew, a slower accrual rate, and a £500m payment into its ailing New Airways Pension Scheme. But that payment was pursuant to workers accepting all the proposals, a point which angered T&G.
“We don’t like the fact BA have gone through a big softening up exercise to say how serious deficit situation is, and then come forward with proposals that place the burden of dealing with the deficit on staff,” a T&G spokesperson told Global Pensions.
“What we are saying is, if the problem is as bad as they say it is, and we believe it is, why is it they are making the £500m cash injection conditional upon the changes being accepted? If you take responsibilities seriously, you would put that sum up front regardless.”
Other proposed changes to the pension scheme included pensionable pay increases no more than inflation, pension increases on retirement capped at 2.5% each year, and company and staff to share the impact of changes in life expectancy, said BA chief executive Willie Walsh.
“These changes are necessary to clear the past deficit and to contain the amount of future funding needed,” he said. “It means working longer to get a similar annual pension, but one that is more secure. This should address the pension problem at British Airways once and for all.”
The T&G spokesman said workers had not ruled out the possibility of strike action should they reject the proposals, and added: “We need to consider details of these proposals, look at the implications and consult with our members.”
BA was not immediately available for comment.
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