British Airways to close final salary scheme
British Airways is closing its final salary scheme and launching a new one next year.
British Airways is to close its final salary pension scheme and replace it with a new one next year.
The current defined benefit scheme, which has 17,000 members, was £2.8 billion in deficit at its last valuation in 2015.
The airline’s defined contribution pension scheme, which has about 20,000 members, will also be replaced.
The plans were first announced in September, since when there has been consultation with unions.
International Airlines Group, which owns BA, said it would launch a flexible benefits scheme incorporating a new defined contribution pension scheme.
A statement said: “The scheme will open on April 1, 2018 replacing the main UK defined benefit scheme, the New Airways Pension Scheme (NAPS), and the main UK defined contribution scheme, the British Airways Retirement Plan (BARP).
“The changes are subject to NAPS trustees agreeing to amend the scheme’s rules to enable closure to future accrual.
“The new scheme will offer market-competitive arrangements with a choice of contribution rates and the ability to opt for cash instead of a pension.
“Active NAPS members will also be offered a choice of transition arrangements including a cash lump sum, additional company pension contributions or additional pension benefits in NAPS prior to its closure.
“The overall financial impact on British Airways will depend, in part, on the transition arrangements members select.”