Trustees of the Airways Pension Scheme (APS) have confirmed they will appeal to the Supreme Court over a recent Court of Appeal judgment striking down their ability to award discretionary increases.
The announcement comes over two months since the ruling was issued, when two of the three judges said the trustees had acted for an improper purpose when both granting themselves a unilateral power to award increases, and then granting such an increase.
The effect of the judgment was to nullify both decisions, over four and a half years after a 0.2% increase above the consumer prices index (CPI) had been awarded.
However, while permission to appeal had been granted, the trustee board hesitated over whether such an appeal would be a good use of scheme assets, leading to a backlash from members who said failing to appeal would be a "breach of trust" and demanded a members' meeting for trustees to explain the decision.
Now, in a statement on the members' website, the trustees said they anticipated the appeal to be heard in the second half of 2019.
"On 11 September 2018, we resolved to continue to appeal against the Court of Appeal's judgment in favour of BA in the APS discretionary increase legislation. We will now be seeking permission from the court to use the scheme assets to fund the appeal and to meet BA's costs should an appeal be unsuccessful."
The Association of British Airways Pensioners (ABAP) welcomed the decision but questioned why it had taken so long.
Vice-chairman Mike Post, who was formerly a trustee of the scheme, said: "The ABAP is pleased that the APS trustee board has eventually decided to proceed with an appeal to the Supreme Court to challenge the Court of Appeal's majority judgment that the introduction of the discretionary increase rule for APS pensions was invalid.
"It is clear that appealing to the Supreme Court… is in the best interests of APS beneficiaries. ABAP is puzzled as to why this was not crystal clear to the individual trustee directors of APS and why a second trustee meeting was required to decide the matter."
Ahead of the Court of Appeal hearings, the APS trustees estimated around 6,100 members would not benefit from the increase due to the drawn-out litigation process, with approximately 3,800 having died by the end of the High Court case. The ABAP gave a "guesstimate" that another 1,000 would die before the litigation ends.
The scheme is yet to hold the members' meeting, with no date having been publicly announced, but the trustees are expected to be heavily questioned on the delay in making the decision to appeal.
The confirmation comes as the scheme completed the market's largest bulk annuity deal to date. In a £4.4bn buy-in with Legal & General, around 60% of pensioner liabilities were insured, with the scheme now 90% hedged against longevity risk.
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