UK – British Airways’ pension scheme trustees have appointed PricewaterhouseCoopers to advise them following BA’s plans to slash its £1.4bn (€2bn) pension deficit – among the largest scheme deficits in the country.

The airline announced proposals last week to pay £500m into its New Airways Pension Scheme (NAPS) in a bid to clear its £1bn past actuarial deficit.

Other plans included increasing the retirement age from 60 to 65, with a slower accrual rate and pensionable pay increasing by no more than inflation. Pension increases on retirement would also be capped at 2.5% each year.

“After a rigorous selection process, the trustees of the Airways Pension Scheme (APS) and New Airways Pension Scheme (NAPS) have appointed PricewaterhouseCoopers to advise them on assessing BA's financial covenant position,” said trustee secretary John Birch.

He added that PWC's appointment at the fund is expected to last “up to around a year” while the statement of funding principles is being completed.

The tendering process started in January and was completed by the end of February. Invitations to tender were sent out to ten firms, and five took part in beauty parades, Birch told IPE.

The tendering process was handled entirely by the in-house pensions team.

“The appointment recognises the Pensions Regulator's suggestion that trustees should consider using commercially available services to assist then in the evaluation of an employer's financial standing.

“The advice received will, in conjunction with advice received from the other trustee advisors, inform decisions on both the technical provisions and any recovery plan needed as part of the statement of funding principles due to be agreed over the next year.”

Watson Wyatt – which is scheme actuary and trustee adviser – will continue to advise the fund on actuarial issues.

Meanwhile, PWC will advise on BA's covenant matters. Both firms will provide information and/or advice to the trustees to help them negotiate a statement of funding principles with BA, said Birch.