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23/03/2006
BA announces plans to raise staff pension age
British Airways has announced plans to raise the retirement age for some of its staff in a bid to clear a £1 billion deficit in its pension scheme.
BA announced that the compulsory retirement age for pilots and cabin crews would rise to 60. However, after five years, the compulsory pension age for cabin crew would rise to 65.
BA said that it would make a payment of £500 million into the pension scheme once the changes were accepted.
The airline also said that it planned to keep a final salary pension scheme with no changes to pension benefits already earned and no increase in staff contribution rates.
Willie Walsh, BA chief executive, said: "This is a solution that will provide competitive, affordable pensions for the future. These changes are necessary to clear the past deficit and to contain the amount of future funding needed.
"It means working longer to clear the past deficit and to contain the amount of future fundng needed. It means working longer to get a similar annual pension, but one that is more secure. This should address the pension problem at British Airways once and for all.
"This package of measures if vital if we are to achieve a competitive cost base, deliver a 10% operating margin, be fit for growth and invest in our future."
However, the Transport and General Workers Union, said that the pension plans would mean "more pain" for BA's workforce. Brendan Gold, T&G national secretary, said: "It was no secret that BA's pension funds were in deficit but we still don't really know if today's measures will be the right ones for our members and for the scheme.
"The finals salary principle remains, which is good, but the company needs to show a lead by recognising its responsibilities and put the cash lump sum up front and not make it conditional."
Mr Gold also said that BA had saved £800 million per year by cutting over 13,000 jobs.
(KMcA/GB)
BA announced that the compulsory retirement age for pilots and cabin crews would rise to 60. However, after five years, the compulsory pension age for cabin crew would rise to 65.
BA said that it would make a payment of £500 million into the pension scheme once the changes were accepted.
The airline also said that it planned to keep a final salary pension scheme with no changes to pension benefits already earned and no increase in staff contribution rates.
Willie Walsh, BA chief executive, said: "This is a solution that will provide competitive, affordable pensions for the future. These changes are necessary to clear the past deficit and to contain the amount of future funding needed.
"It means working longer to clear the past deficit and to contain the amount of future fundng needed. It means working longer to get a similar annual pension, but one that is more secure. This should address the pension problem at British Airways once and for all.
"This package of measures if vital if we are to achieve a competitive cost base, deliver a 10% operating margin, be fit for growth and invest in our future."
However, the Transport and General Workers Union, said that the pension plans would mean "more pain" for BA's workforce. Brendan Gold, T&G national secretary, said: "It was no secret that BA's pension funds were in deficit but we still don't really know if today's measures will be the right ones for our members and for the scheme.
"The finals salary principle remains, which is good, but the company needs to show a lead by recognising its responsibilities and put the cash lump sum up front and not make it conditional."
Mr Gold also said that BA had saved £800 million per year by cutting over 13,000 jobs.
(KMcA/GB)
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