UK roundup: British Airways, TPR on PAYE, Greggs, PPF
UK - Two trustees who resigned in protest over British Airways switching its pension scheme from the retail prices index (RPI) to the consumer prices index (CPI) have rejoined the trustee board after standing for re-election.
Both Cliff Pocock and Graham Tomlin resigned from the Airways Pension Scheme (APS) trustee board earlier this year over concerns the change to CPI would lead to lower pensions for members.
A third, Mike Post, also resigned following the board’s decision to link inflation increases to the index that excludes factors such as the cost of mortgage interest payments and other housing-related measures.
The APS is the older of the airline’s two schemes, which have seen their deficits become problematic as the company negotiated a merger with Spanish carrier Iberia last year.
At the time the change was announced by the government last year, it argued that CPI better reflected the increase in the cost of living for pensioners - while the practical implementation has seen numerous pension schemes cut their deficit as a result of the switch.
Changing the measure of inflation on both APS and the New Airways Pension Scheme (NAPS) earlier this year cut the net deficit of both schemes by a combined £1.3bn (€1.5bn).
Meanwhile, small companies sharing a pay as you earn (PAYE) pension funds will see their staging dates for auto-enrolment pushed back by nearly two years, new guidance from the Pensions Regulator (TPR) reveals.
As part of detailed guidance published by TPR to prepare the country’s employers for soft-compulsion, the regulator revealed the staging dates for employers based on the size of their workforce.
According to the newest timeline, while small companies that have individual PAYE schemes will see their staging date occur no later than March 2014, companies sharing PAYE pension funds will see their staging date postponed by as many as 23 months - with the latest staging date now set as January 2016.
In other news, UK bakery Greggs has recorded a credit of £9.7m (€11.1m) in its defined benefit pension scheme over the first half of this year after it switched from the RPI to the CPI.
In its latest financial results, Greggs said the credit stemmed from the decision that the indexation of occupational pensions should in future be based on the CPI rather than the RPI.
Actuarial losses on Greggs’s defined benefit pension plans stood at £1.9m as of 2 July.
The switch helped to reduce the scheme’s deficit to £866,000 against the previous £16.3m reported in July last year, Greggs said.
Finally, the Pension Protection Fund (PPF) has revealed that the aggregate deficit of the 6,533 schemes in the PPF 7800 index increased to £67.3bn at the end of July.
The previous deficit was estimated at £8.3bn at the end of June.
The funding ratio fell from 99.2% to 93.7%, while total assets stood at £1001.4bn and total liabilities reached £1068.7bn at the end of last month.
According to the data, 4,684 schemes were in deficit and 1,849 schemes were in surplus.