UK – A pensioner group has slammed as “much too late” a decision by the trustees of the British Airways Pension Scheme to cut its equities holding to 15% by the end of 2013.

“The APS trustees had decided to reduce the 30% holdings in equities to 15% by the end of 2013,” the Association of British Airways Pensioners said on its website. “This will partially protect APS from further falls in the equity markets but the decision has been made much too late.”

Mervyn Walker, chairman of trustees at the group’s two defined benefit schemes, said in November that APS has been gradually moving into bonds, reflecting the maturity of the scheme. There were no immediate plans for NAPS to move towards bonds.

The pensioner group said: “At the last valuation APS had a reported surplus of £820m most of which has been lost. Our actuaries advise that if there was a ‘discontinuance’, that is if BA became insolvent, their calculation is that APS, on a funding level of 90%, would have a deficit of £600m.”

ABAP said with a funding level of 60%, BA’s other scheme - the New Airways Pension Scheme, or NAPS – “the deficit would be £2.1bn”.

The association said BA’s annual report published in September 2004 “effectively conceals the unpleasant” deficit figures of £600m and £2.1bn.

It stated: “The increased funding of £115m for NAPS recommended in the valuation does no more than pay the interest on a deficit of £2.1bn. The funding of the deficit is now totally reliant on future equity performance.”

It said the 2003 valuation numbers “underestimate the real position” – and that the company’s planned contributions remain “inadequate”.