According to a Web site statement , the plan includes annual company pension contributions of some $550.7 million for the next 10 years and a one-time cash injection of $1.57 billion.
The deal also calls for an additional $295 million in cash over the next three years, depending on the airline’s financial performance, according to the statement.
The benefit changes include lifting the cap on total pension contributions to 30% from 15%, new tax-efficient ways of making pension contributions and capping future pension qualifying pay rises to inflation, according to the statement. Also, flight and cabin crew now have a retirement age of 65, up from 55, in line with other BA employees.
The benefit changes will deliver an immediate deficit reduction of some $786.7 million and a savings of some $157.3 million a year, according to the company.
British Airways’ chief financial officer Keith Williams said in the statement: “This brings to a close our lengthy consultation process on pensions. It provides greater stability and certainty for all 70,000 (plans) members and frees the company to move forward into an exciting phase of investment and growth.”