UK - As British Airways gears up to merge with Iberia, British Airways Pension Trustees have rejected calls for the trustee board chairman Roger Maynard to resign over impartiality issues.
"Based on independent legal advice, the trustees are confident that the arrangements in place to manage any potential conflict of interest are effective and appropriate in the circumstances," the British Airways Pension Trustees said in a statement.
As well as chairing the pension scheme trustee board, Maynard is also director of investments at BA.
The trustee board was responding to calls from the Association of British Airways Pensioners (ABAP) and umbrella organization the Occupational Pensioners' Alliance (OPA) for Maynard to resign.
The ABAP has written to the Pensions Regulator asking for Maynard's immediate replacement.
Roger Turner, executive officer of the OPA, said: "He (Maynard) is a company director who has been closely concerned with the tie-up with Iberia and cannot therefore be seen as someone who can, at the same time, represent the interests of all the schemes' members and also those of the company. It is totally unreasonable to believe otherwise."
Last week, BA and Iberia agreed the terms of their proposed merger. But BA's huge pensions deficit - well over £2bn (€2.2bn) according to latest reported estimates - could be a major sticking point in the deal. The airlines have agreed that Iberia can terminate the deal if it is unhappy with the outcome of discussions between BA and the pension scheme trustees over funding.
In a statement, BA itself also rejected claims of bias around Maynard's dual role: "On the basis of legal advice and the fact that Roger Maynard played no part in the pension provisions outlined in the MoU (Memorandum of Understanding) signed with Iberia, we are confident there has been no conflict of interests."
The OPA said it has long advocated independent chairmen for trustee boards at UK pension funds. "At present only one third of the trustee boards of FTSE 100 companies are independent," said Turner.
A recent study by trustee recruitment firm Trustee GAAPS found that out of the remaining two thirds, half are directors or senior managers of the company that funds the scheme, and the other half are ex-directors, he said.