British Airways to curb pension benefits
On September 7, British Airways announced the closure of a main pension scheme for their workers. According to the new plan, there will be no future bonuses but already earned pension benefits will stay unchanged.
The reason for this decision is “the significant and growing funding deficit” faced by the New Airways Pension Scheme (NAPS).
“Since 2003, the airline has pumped £3.5bn into NAPS, but the deficit – resulting from record low interest rates and increased life expectancy – had risen to £3.7bn by March this year,” BA said in statement.
For now, BA has an agreement with NAPS trustees to contribute between £300 million and £450 million a year until 2027 to fill in the deficit.
NAPS has 17,000 BA staff members. Now they face uncertainty in their retirement, as Unite and GMB said.
“Our team of financial analysts has worked tirelessly with the airline over the last few months to explore ways to keep the pension scheme open and secure it for the future. This announcement sadly confirms that our advice has gone unheeded ,” the union mentioned in a statement.