Originally Posted by
CBear
I'm predicting it won't have a massive impact on staff relations.
I'm not so sure. Even as a sub-30 year old BARP member, who stands to benefit from this change, I can see this as another sad reflection on the attitude of current BA direction. I'm glad I am counting down the days already... As I said in my 'leaving' post after I handed my notice in, I harbour no animosity towards BA but as time goes by, I'm realising I made the right choice. I'd be pleased for myself that it's a vindication of my decision, but I'm also angry about the way my colleagues who have given me so much and who genuinely make a day to day positive impact on the BA operation have been treated by this announcement.
Maria's email to staff in full:
Dear colleagues,
We will soon begin a 60-day consultation covering the future pension arrangements for our colleagues in NAPS and BARP.
A review of our UK pensions has led us to believe the time has come to close NAPS to future accrual and introduce a new scheme. This means that additional pension benefits will not be earned in NAPS, but benefits already earned will be better protected. We will be making such a proposal in the coming weeks.
So why do we need to do this:
The 2015 NAPS valuation showed it had a £2.8bn deficit even though the company has paid more than £3.5bn from its profits since 2003 to eradicate it. Despite this, the deficit continues to grow. By March 2016, it had risen to £3.4bn and, by March 2017, it had risen to £3.7bn. A deficit means there isn’t enough money in the scheme at the moment to fund the future retirement of every NAPS member.
Under the deficit reduction plan agreed with the NAPS Trustees, the company has committed to pay between £3bn and £4bn during the next 10 years. To put this into context, it took the first five months of last year – or 158 days – before we made enough operating profit to cover our pension deficit payments for that year.
And future costs are rising too. Based on recent interest rates, they could rise from 33 per cent to 45 per cent of pensionable pay for each NAPS member. These levels of pension costs are not sustainable and are seriously hampering our ability to invest in growing our business and improving our customer experience. And having a successful growing business is essential to ensure that the NAPS deficit is fully paid off and that all NAPS members receive the pension they have already worked to build up.
Since January we have had a number of meetings with our trade unions during which we have extensively explored alternatives that would allow us to maintain NAPS open to future accrual. After careful examination of all the alternatives with our pension advisors we have reluctantly concluded that none of the alternatives address the NAPS challenges. This is why we are proposing to close NAPS to future accrual and introduce a new pension arrangement.
The company’s defined contribution scheme, BARP, is a good scheme but, having reviewed it, we believe we can provide a better defined contribution scheme with improved benefits in the future. Specifically, the government’s recent pension changes give us the opportunity of providing more choice and greater flexibility.
If we don’t tackle the problem ahead of the next NAPS valuation in March 2018, then the deficit will have risen again and our ability to address your concerns will reduce significantly.
If you’d like to share your views and find out more, you can register to attend one of the [Removed Link].
We will contact you again at the start of the consultation with more information. We’ll also send a booklet to your work email address with details of the briefings and the other ways to share your views. If you are an operational colleague and would like to attend a briefing, please make sure you have the permission of your manager before booking your place. In the meantime, you can read more about BA's pension schemes on the [Removed Link]
Maria