THE row over British Airways&rsquo; retirement scheme intensified yesterday as an independent group of pensioners called for the urgent removal of Roger Maynard as chairman of the trustees.<br /><br />Anger is building over the perceived conflict of interests in Maynard&rsquo;s chairmanship of both BA&rsquo;s pension funds &ndash; whose huge deficits are potential stumbling blocks in its proposed merger with Spanish airline Iberia &ndash; and his boardroom roles at BA and Iberia.<br /><br />Maynard, who is a director of Iberia and investment director of BA, has been closely involved in aspects of the &pound;4.4bn tie-up between the airlines. The deal could fall apart if BA fails to agree plans to fix the estimated &pound;3-4bn shortfall in its savings pot with trustees.<br /><br />Last night the chairman of the Association of British Airways Pensioners (ABAP), Dayne Markham, told City A.M. Maynard&rsquo;s position was &ldquo;like being Prime Minister and leader of the opposition at the same time&rdquo;.<br /><br />The ABAP has written to the Pensions Regulator calling for Maynard&rsquo;s immediate replacement.<br /><br />Markham said: &ldquo;Roger Maynard&rsquo;s position is untenable. The appointment of the trustees&rsquo; chairman by BA dates back to before the company was privatised, before there was pressure on the pension scheme, and it does not make sense for that arrangement to continue.&rdquo;<br /><br />Markham added: &ldquo;We are entirely supportive of Maynard as a person, but he is being put under unbearable pressure and we want an independent chairman for both schemes.&rdquo;<br /><br />BA has until June to agree a way forward with its pension fund trustees. As chairman of the trustees, Maynard will be influential in deciding what terms they settle on, but as director of BA and Iberia he will share management&rsquo;s desire to reach an agreement as soon as possible.<br /><br />A BA spokesman said: &ldquo;We are confident there is no conflict of interest.&rdquo;<br /><br />The Pensions Regulator has power to remove trustees where necessary, although it prefers to mediate. The regulator said it could not comment on specific cases. A spokesman for the other BA trustees also declined to comment. Meanwhile, more than 12,000 BA cabin crew yesterday began voting on whether to hold disruptive strikes over the Christmas period.<br /><br /><strong>Q &amp; A : BA PENSION SCHEME ROW</strong><br /><br /><strong>Q.WHY IS BA&rsquo;S PENSION SCHEME DEFICIT SUCH A BIG ISSUE?</strong><br />A.BA has two final-salary pension schemes, both closed to new joiners, with around 100,000 members. The Airways Pension Scheme and the New Airways Pension Scheme are expected to show a combined deficit of &pound;3-4bn when actuaries complete their triennial review before Christmas. BA has until June to agree with trustees the amount it will put into the funds in the future &ndash; currently &pound;320m a year. If Iberia thinks the arrangements are &ldquo;materially detrimental&rdquo; to the merger it can walk away, subject to an &pound;18m break fee.<br /><br /><strong>Q.WHAT IS THE PROBLEM WITH ROGER MAYNARD&rsquo;S POSITION?</strong><br />A.In the past, negotiations with pension fund trustees have scuppered acquisitions. Sir Philip Green cooled on his &pound;9.1bn bid for Marks &amp; Spencer in 2004 when trustees laid out demands for &pound;750m a year, described by analysts as a &ldquo;poison pill&rdquo;. As chairman of BA&rsquo;s trustees, Roger Maynard is in a position to influence the terms they negotiate with management. At the same time, as a board member of both BA and Iberia specifically tasked with smoothing the merger process, he has an inherent interest in striking a deal that will not alarm Iberia. Pensioners are concerned about the apparent conflict of interests. <br /><br /><strong>Q.WHO ELSE IS INVOLVED IN THE NEGOTIATIONS?</strong><br />A.Iberia has hired pensions consultant Mercer to go through the actuarial implications with a fine-toothed comb, while BA has engaged accountant PriceWaterhouseCoopers. Mercer will be interested in the views of independent pensions expert JohnRalfe, who has warned the buy-out value of BA&rsquo;s deficit could be several times the company&rsquo;s market capitalisation. The Pensions Regulator has indicated it will accept a longer-term timeframe than usual for BA to resolve its deficit but has not yet approved BA&rsquo;s plan to ring-fence its liabilities in the operating company that would sit as a subsidiary below the merged company. While it does not comment on specific cases, the regulator said it will not give clearance to arrangements that put members&rsquo; benefits at risk.<br /><br /><strong>Q.WHAT HAPPENS FOLLOWING THE ABAP&rsquo;S COMPLAINT?</strong><br />A.The chairman of BA&rsquo;s pension trustees is appointed by company management, a tradition that dates back to BA&rsquo;s days in state ownership. BA has said it will stand by Maynard. The Pensions Regulator said it would process any complaint as standard. Meanwhile, considerable power lies in the hands of the other pension fund trustees, six of whom are elected and five of whom are chosen by BA.