BA set for fresh spat on pensions
BRITISH Airways is on a fresh collision course with union leaders over plans to address the gaping deficit in its retirement scheme, experts warn.
The troubled airline has until June to agree a solution with its trustees to the £3.7bn shortfall in its two defined benefit funds, which together cover around 100,000 retired and working staff. The agreement needs to be cleared by the Pensions Regulator.
Industry observers believe management’s only option will be to close its scheme to existing members – a move likely to be greeted with fury by cabin workers’ union Unite.
BA pours around £300m into its pension deficit annually, an amount it will be unable to increase given the heavy losses it will sustain this year.
John Ralfe, an independent pensions consultant, said: “The only way the company stands any chance of plugging the huge deficit is by closing to existing members and recycling the cash, despite the impact that would have on industrial relations.”
Dr Ros Altmann, former pensions adviser to the government, said the regulator could lean on BA to close the scheme to existing members.
“This could lead to such damaging industrial action that the company itself will be at risk – and it could also lead to a major court challenge due to the terms and conditions of staff being violated,” she said.
The news comes after a court ruled a planned Christmas strike illegal.