In a company news release, BA said its trustees have confirmed that annual contributions of £497 million would be needed to fund the scheme unless changes to future benefits proposed earlier this year are introduced – an increase in company contributions from five to 12 times members’ contributions. Negotiations are now underway to agree to a funding plan and benefit changes.
Proposed changes to NAPS, according to the release, include:
- Raising the normal retirement age to 65,
- A slower accrual rate,
- Inflation capped pensionable pay increases,
- Capped pension increases on retirement at 2.5%, and
- Sharing the impact of changes in life expectancy.
BA is proposing to make a £500-million payment to the scheme once the changes are accepted.
If the changes are not accepted, increasing annual contributions to NAPS could put the “long term viability of BA in jeopardy,” the trustees said in a letter to scheme members sent this summer. An independent financial analysis from PricewaterhouseCoopers for the trustees led them to conclude BA could not sustain contributions much above the current level.