UK – British Airways PLC may change the structure of its staff pension scheme in a bid to tackle its £1.4bn (€2bn) deficit.
A spokesperson for the airline told IPE: “There could be a change to the pension. A proposal has not as yet been put forward by British Airways to be considered by the trustees and the membership.”
BA has informed staff of potential changes that could be made, including changes in contribution rates, a change in build up rates and a shift to a career average scheme.
According to the spokesperson, BA indicated it would like to make possible proposals to address the deficit by the end of March to coincide with the triennial valuation.
“But we haven’t heard a peep yet,” said the spokesperson, stating that these proposals could be delayed by another three months.
The proposals will also have to be discussed with trustees and unions before they can be implemented.
BA dismissed media claims that it plans to cut its staff pensions by a third as “utter fiction”.
This followed a report in a business newspaper stating the planned cuts were put to staff and unions during a briefing – a move that could result in widespread industrial backlash.
Meanwhile, the Confederation of British Industry has unveiled its response to Lord Turner’s Pension Commission proposals for a national pensions scheme.
It said auto-enrolment without compulsion “is the best way of increasing pensions saving without undermining existing provision”.
It recommended a ‘Pension Builder’ plan to boost employee pension contributions, combined with additional support for smaller businesses.
It said forcing employers to contribute is “neither fair, nor equitable or sensible”. Turner is a former head of the CBI.