8th Jan 2007 07:00
British Airways PLC05 January 2007 SUPPORT FOR PENSION CHANGES British Airways today (January 5, 2007) welcomed the decision by its tradeunions in the BA Forum to recommend changes to its New Airways Pension Scheme(NAPS), which has a £2.1 billion deficit. The British Airways Forum represents the airline's four unions and isrecommending acceptance of the proposal and will now consult with membersformally. The company has agreed to make a one off contribution of £800 million into thefund subject to acceptance of benefit changes. Together with a one-off employeesaving of £400 million and changes to future benefits, the NAPS pension deficitwill be reduced by more than half from an existing £2.1billion to £0.9 billionand the company's annual contributions will be around £280 million a year forthe next ten years. British Airways' chief executive, Willie Walsh, said: "This is great news.Together with the NAPS Trustees and staff, we have found a shared solution thathelps secure the pensions of our 33,500 NAPS members and removes a major blockerto future investment in British Airways. This brings the NAPS deficit andongoing contributions to a level which is affordable by British Airways andeffectively tackles one of the most fundamental issues we face." A funding plan to clear the NAPS deficit over 10 years was agreed with thepension scheme trustees in 2006, subject to members accepting changes to futurebenefits. ends January 5, 2007 002/KG/07 Notes to editors: Details of the proposed pension arrangements for NAPS will be released followingcommunications to employees on Monday. Other background information: • The NAPS actuarial deficit rose from £928 million in 2003 to £2.1 billion in 2006 despite a doubling of BA's contributions and a recovery of the stock market. • BA's contribution to NAPS in 2005/6 was £235 million - the equivalent of five times members' contributions. Without future benefit changes, contributions would have to increase to £497 million per annum. • Under the proposal BA will pay the £800m one-off cash injection with £250 million this month and £550 million in April. • The company will also pay up to £150 million more in contributions over the next three years subject to meeting certain financial targets. • NAPS has 33,794 active members, 20,269 deferred and 15,185 pensioners. The airline closed NAPS to new members in 2003 but members continue to accrue benefits. • In 2003, the airline introduced British Airways' Retirement Plan (BARP) for new joiners, including chief executive Willie Walsh who joined in May 2005. BARP is a defined contribution scheme. • NAPS is a final salary scheme based on length of service multiplied by pensionable pay, currently divided by 56 for ground staff and 52 for air crew with normal retirement age of 60 for ground staff and 55 for aircrew. Certain information included in these statements is forward-looking and involvesrisks and uncertainties that could cause actual results to differ materiallyfrom those expressed or implied by the forward looking statements. Forward-looking statements include, without limitation, projections relating toresults of operations and financial conditions and the Company's plans andobjectives for future operations, including, without limitation, discussions ofthe Company's Business Plan programs, expected future revenues, financing plansand expected expenditures and divestments. All forward-looking statements inthis report are based upon information known to the Company on the date of thisreport. The Company undertakes no obligation to publicly update or revise anyforward-looking statement, whether as a result of new information, future eventsor otherwise. It is not reasonably possible to itemize all of the many factors and specificevents that could cause the Company's forward looking statements to be incorrector that could otherwise have a material adverse effect on the future operationsor results of an airline operating in the global economy. Information on somefactors which could result in material difference to the results is available inthe Company's SEC filings, including, without limitation the Company's Report onForm 20-F for the year ended March 2006. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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