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BA Pension Schemes' Triennial Valuation

International Airlines Group's subsidiary British Airways has reached agreement in principle with the trustees of its two main pension schemes on the schemes' regular triennial valuations.

The agreement confirms that the existing contribution plans for the Airways Pension Scheme (APS) and New Airways Pension Scheme (NAPS) remain on track to repay the pension liabilities. The valuations are based on the schemes' funding position as at March 31, 2012.

The main terms of the agreement are:

  • A combined technical deficit of £3.3 billion (compared to £3.2 billion at March 31, 2010, which was the basis for the last deficit recovery plan)
  • No change to the existing contribution arrangements which were agreed in 2010
  • The ability for British Airways to move to normal dividend payments over time.
  • British Airways will continue to make additional deficit contributions if its cash balance at March 31 in any year exceeds £2 billion (2010 threshold: £1.8 billion).

The slight increase in deficits between March 2012 and March 2010 is due to a reduction in the interest rates used to discount the schemes' liabilities, partly offset by other changes including lower pension increases.