The final salary scheme, which promises workers a guaranteed portion of their working income in retirement, had already been closed to new members since 2003. Now people who had joined that scheme before 2003 and have been paying into the plan in the expectation of a final salary-based income in retirement would be moved into other arrangements, from April, IAG said.
International Airlines Group’s subsidiary British Airways has decided, following consultation with its trade unions and employees, to launch a flexible benefits scheme incorporating a new defined contribution pension scheme.
British Airways plans to close its main final salary pension scheme and replace it with what it called a more flexible retirement saving plan that will help it tackle its £2.8bn pension deficit.
BA first announced the closure of the NAPS scheme in September, then carried out a consultation with its workers and their representatives. At the time BA said that it had poured £3.5bn into NAPS since 2003 but still not managed to get the funding deficit under control.
According to IAG’s statement: