British Airways has revealed that it plans to scrap its main pension scheme after the fund’s deficit ballooned to £3.7bn.
BA said that if plans go ahead, employees would no longer be able to make payments into its New Airways Pension Scheme (NAPS).
John Moore, head of industrial relations at the British Airline Pilots’ Association (BALPA), added: “It is bitterly disappointing that BA is now seeking to close NAPS to future accrual and thereby remove a highly valued employment benefit.”
The proposals were part of a consultation the airline expects to commence “in the coming weeks.”
The proposed amendments would close the scheme to future accruals and see payments from its retirement programme limited, meaning staff would not see an increase in their retirement payout with their salary and tenure.
Unions Unite and GMB have expressed “dismay and bitter disappointment”, but BA argues that it was Britain’s biggest pensions deficit relative to the company’s overall financial value.
The airline has said that it will pay £750m in pension contributions this year, and has already pledged to contribute between £300m and £450m a year until 2027 to address the NAPS deficit.
There are about 17,000 people in NAPS and over 20,000 in the airline’s defined contribution (DC) pension scheme, the British Airways Retirement Plan (BARP).
BA claims its new pension arrangements “will improve benefits for the majority of United Kingdom colleagues.”
Unite and GMB issued a joint statement to the news, expressing their concern that “thousands of loyal and long-serving staff, who have helped build British Airways into a world-class flag-carrier for this country and one of the most recognisable global brands, now face uncertainty in their retirement.”