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Trade unions criticise BA plans to close pension scheme

Unions have criticised plans by British Airways to close its main defined-benefit pension scheme in an effort to tackle a “significant and growing funding deficit”.

The threat of strike action was not specifically mentioned but the airline has faced a series of walkouts by Heathrow-based cabin crew already this year in a long-running dispute over pay.

BA said that if the proposals went ahead, employees would no longer be able to make further payments into its New Airways Pension Scheme (NAPS).

This would protect the benefits that members had already earned, according to the airline

But the Unite and GMB unions voiced “dismay and bitter disappointment”.

BA said the proposals were part of a consultation that would be getting under way “in the coming weeks”.

The airline said it had injected £3.5 billion into NAPS since 2003, but the deficit had risen to £3.7 billion by March this year.

“It is the largest of all UK company pension deficits relative to the company’s overall financial value,” the BA said.

“In 2017 alone, the airline will pay £750 million in pension contributions and has already committed to provide between £300 million and £450 million a year till 2027 to address the NAPS deficit.

“If NAPS remained open to future accrual, the cost to the company of providing future benefits to NAPS members could rise to 45% of individuals’ pensionable pay in 2018 – more than four times the typical employer contribution of UK airlines.”

There are about 17,000 people in NAPS and more than 20,000 in the airline’s defined-contribution pension scheme, known as BARP.

Unite and GMB issued a joint statement expressing, “on behalf of our members and in the strongest possible terms, both our dismay and bitter disappointment at the news that British Airways has announced its intention to close its main pension scheme”.

“Thousands of loyal and long-serving staff, who have helped build British Airways into a world-class flag-carrier for this country and one of the most recognisable global brands, now face uncertainty in their retirement.”

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