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|British Airways finalises new pension scheme|
RNS Number : 6303J
BRITISH AIRWAYS FINALISES NEW PENSION SCHEME
The schemes have been replaced by a flexible benefits scheme, incorporating a new defined contribution pension scheme, called the British Airways Pension Plan (BAPP). It offers a choice of contribution rates and the ability to opt for cash instead of a pension.
NAPS active members were offered a choice of transition arrangements. The financial impact of these arrangements is as follows:
· Cash transition costs, paid either directly to members or into their pension accounts, of
· Some members chose a non-cash option to increase their NAPS pensions prior to closure which led to an increase in the scheme's liabilities.
· However, the net impact of these non-cash options and the reduction in liabilities brought about by closure, due to different pay and pension growth assumptions, will be a reduction in IAS19 liabilities of
· In Q1 2018, the net impact of cash transition payments, the liability reduction and BARP closure costs will be treated as an exceptional gain of
· The reduction of IAS19 pension liabilities does not change the current recovery plan payments to NAPS, which were agreed in 2016 as part of the full actuarial valuation of the scheme.
The annual costs for BAPP are expected to be approximately
The next full NAPS actuarial valuation is due as at
NOTES TO EDITORS
NAPS opened on
The reduction in NAPS pension liabilities is related to how members' pensions are assumed to increase up until the point of retirement. Following closure, members' deferred pensions will now be increased annually by inflation up to five per cent per annum (measured using CPI), which is generally lower than the previous assumption for pay growth, which includes pay rises and promotions.
As part of the closure of
This announcement contains inside information and is disclosed in accordance with the company's obligations under the Market Abuse Regulation (EU) No 596/2014.
Certain statements included in this report are forward-looking and involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such forward-looking statements.
Forward-looking statements can typically be identified by the use of forward-looking terminology, such as "expects", "may", "will", "could", "should", "intends", "plans", "predicts", "envisages" or "anticipates" and include, without limitation, any projections relating to results of operations and financial conditions of
It is not reasonably possible to itemise all of the many factors and specific events that could cause the forward-looking statements in this report to be incorrect or that could otherwise have a material adverse effect on the future operations or results of an airline operating in the global economy. Further information on the primary risks of the business and the risk management process of the Group is given in the Annual Report and Accounts 2017; these documents are available on www.iagshares.com.
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