BA seeks to close NAPS pension scheme

Old Sep 7, 17, 12:43 pm
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BA seeks to close NAPS pension scheme

I wonder what impact this will have on staff relations?
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Old Sep 7, 17, 12:47 pm
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No idea, Sir. I have no idea what a NAPS is. A link would be helpful.
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Old Sep 7, 17, 12:52 pm
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It's New Airways Pension Scheme, BA's defined benefit scheme which closed to new members in 2003. They are now proposing to close it to any further accruals for the staff still on it, although they will continue to fund it to pay out existing obligations. All staff would from now on have their employer contribution go into the defined contribution scheme.
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Old Sep 7, 17, 12:57 pm
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That sounds sufficiently complicated, and I have zero understanding of modern pension schemes. I assume this is a BA cost-saving measure?
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Old Sep 7, 17, 1:02 pm
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Originally Posted by jimthewhiz View Post
I wonder what impact this will have on staff relations?
Originally Posted by ajeleonard View Post
It's New Airways Pension Scheme, BA's defined benefit scheme which closed to new members in 2003. They are now proposing to close it to any further accruals for the staff still on it, although they will continue to fund it to pay out existing obligations. All staff would from now on have their employer contribution go into the defined contribution scheme.
I'm predicting it won't have a massive impact on staff relations.
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Old Sep 7, 17, 1:05 pm
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Last edited by ahmetdouas; Nov 12, 17 at 11:13 am
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Old Sep 7, 17, 1:05 pm
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I've entered the working world when jobs for life were gone, getting on the property ladder without a significant inheritance - which I never had - impossible, and defined benefits pensions no longer available. In other words, I'm on BARP, the defined contribution pension scheme of BA.

Maria Da Cunha's email mentions NAPS deficits that can only be described as Greek. Frankly, I don't see any other way but to shut it down and freeze it to future contributions. The youngest NAPS subscriber will nonetheless get a pension that is double the one of any defined benefit chap anyway...
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Old Sep 7, 17, 1:10 pm
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Frankly BA is quite late in shutting down the DB scheme to future accruals of existing members. Many other companies took this action years ago.
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Old Sep 7, 17, 1:17 pm
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So the way I read it is that they're freezing the NAPS as it is. So current employees cannot accrue anymore into that pension....
What they have accued until today is what they will get plus anything they accrue in the stakeholder pension.
Having a couple of friend who will be effected by this I totally back them to fight this all the way.

I am disgusted that BA do not want to fulfil their true liabilities.
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Old Sep 7, 17, 1:23 pm
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Originally Posted by Wong Jnr View Post
So the way I read it is that they're freezing the NAPS as it is. So current employees cannot accrue anymore into that pension....
What they have accued until today is what they will get plus anything they accrue in the stakeholder pension.
Having a couple of friend who will be effected by this I totally back them to fight this all the way.

I am disgusted that BA do not want to fulfil their true liabilities.
BA cannot continue with this millstone around its neck, that's why thousands of companies have taken the same action.
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Old Sep 7, 17, 1:41 pm
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The 'good old days' BA management left such a mess.
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Old Sep 7, 17, 1:48 pm
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Probably won't impact senor Cruz...
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Old Sep 7, 17, 2:25 pm
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Originally Posted by CBear View Post
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

Last edited by alextheengineer; Sep 7, 17 at 2:30 pm Reason: Remove hyperlinks to BA intranet and excess line spacing!
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Old Sep 7, 17, 3:21 pm
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Originally Posted by alextheengineer View Post
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.
Great communication. She's saying that not enough money is being paid into the system to keep current commitments, but makes it sound like there are somehow factors at play that could not have been foreseen.
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Old Sep 7, 17, 3:28 pm
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In response, Unite and GMB issued a joint statement expressing, "on behalf of our members and in the strongest possible terms, both our dismay and bitter disappointment at the news that British Airways has announced its intention to close its main pension scheme".

"Thousands of loyal and long-serving staff, who have helped build British Airways into a world-class flag-carrier for this country and one of the most recognisable global brands, now face uncertainty in their retirement."
http://www.bbc.co.uk/news/business-41193122

Could there be an impending strike on the horizon?
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