British Airways to defer £450 million in pension plan payments to preserve cash

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• Simon says:

  23 Feb23 February 07:04

  Ref your last line – if you are referring to an insolvency event pushing the Pension Scheme into the PPF then that burden won’t fall on taxpayers – the Fund is funded by a levy on pension schemes, not through the tax pot.

  • Mark says:

    23 Feb23 February 07:19

    its also worth saying that the staff who have dedicated their careers to British Airways will likely get a reduced pension benefit in the event the BA Scheme enters the PPF

• J says:

  23 Feb23 February 07:29

  Take £1bn from the pension, stick it in Bitcoin, wait until December, problem solved 😂

  • davewinch says:

    23 Feb23 February 10:19

    Or put it in Cardano, wait until next week 😉

• J says:

  23 Feb23 February 07:29

  Or a bigger one created, but pffft, what’s a billion between friends 😉

• T says:

  23 Feb23 February 08:31

  Bad deal for the taxpayer. Why the government is not getting equity as part of the deal is just poor.

  • Nick says:

    23 Feb23 February 09:19

    Because the government is not expecting to have to pay a penny.

    Why on earth did they ever create such a ridiculous pension arrangement in the first place though.

    • Rob says:

      23 Feb23 February 09:37

      The year before I joined HSBC it had a 20 year pension scheme for management (it closed it just before I joined) – ie if I had worked from 21 to 41 I would have accrued enough pension rights to take a pension at 55 (or whatever) on 2/3rd of my final salary. It was ludicrous. You could get up to, say, £150k base salary by 41, resign, spend 14 years (or whatever) taking it easy knowing that your £100k pa pension was ready to kick in ….

      • MJ says:

        23 Feb23 February 09:45

        If only I had parents who had told me to take this career path.

      • Chris Heyes says:

        23 Feb23 February 09:58

        Rob I agree wholeheartedly with you (not the same amounts though)
        But the taking it easy bit has been fantastic the last 23 years
        long may it last
        You will never know what you are missing !
        Not for everyone though, partners brother retired at 68 Dec and he’s lost already
        we knew it would happen if you work all your life when you finish you seem to give up for some strange reason instead of looking forward

        • Greg says:

          23 Feb23 February 11:38

          Fantastic lol

      • T says:

        23 Feb23 February 13:19

        This current system is a massive Ponzi scheme the earlier you get in the better off you are.

      • Jonathan says:

        24 Feb24 February 06:13

        Rob was this on the international manager program? Or across the bank entirely based on grade?

        I’m still amazed by family in their 90s who were branch managers in their hayday and get private medical for life! The cost of that to self fund at their age would be vast.

        • Rob says:

          24 Feb24 February 08:48

          This was the standard graduate trainee scheme for the investment bank.

    • ken says:

      23 Feb23 February 10:02

      Life expectancy shorter, nominal investment returns high, inflation ate away pensions in payment.

      In 1989 the BA pension surplus in the old scheme (APS – pre dating privatisation) was such that the trustees granted BA a 30 year contribution holiday !

      One thing Thatcher & Brown have in common.
      Incompetent and catastrophic pension reforms.

    • T says:

      23 Feb23 February 13:23

      With all due respect that’s short sighted. The taxpayer (You and I) are allowing this company to exist and are the lender of last resort we deserve to be compensated because there IS risk and shareholders will benefit from our generosity.

• kevbar says:

  23 Feb23 February 09:19

  Maybe they now need the £2 billion loan to buy enough nectar points for everyone 🙂

• Chris Heyes says:

  23 Feb23 February 09:48

  My company stole from the pension pot ( i say stole because they had agreed payments that they “took a holiday” from paying
  If it’s agreed payments and not made, that’s stealing (in my book)
  No-one was informed on the pension board (except the 3 people the company placed on the board) this was over 30 years ago
  The company still exists although taken over twice
  The company is still trying to make up the shortfall it created itself
  shameful !

• Colin MacKinnon says:

  23 Feb23 February 13:00

  Be interesting to know if the senior pilots have transferred out. The top pension from the PRF is around £45k – not a lot if you were expecting six figures.

• will says:

  23 Feb23 February 13:12

  It blows my mind how anyone’s pension can ever be on the line.

  Why is it so difficult to legislate that everyone’s pension is held separate from any company / public purse and based solely on their contributions and whatever it’s invested in?

  I also object to using pensions in “incentives packages” for high paid workers or public sector workers. Just make that salary, then jobs are directly comparable and we wouldn’t get into this ridiculous situation where an employees pension that they’ve paid into from their salary literally does not exist.

  • ken says:

    23 Feb23 February 13:50

    Will – defined contribution pensions are exactly as you say.

    These are final salary schemes – the benefit is a promise, albeit backed up by the scheme assets.
    The schemes are at the whim of investment returns, inflation, life expectancy and most of all gilt returns. As interest rates have plunged, the schemes deficits have increased substantially.

    • Jonathan says:

      24 Feb24 February 06:10

      Frankly a lot of the younger amongst us would relish the chance to have got into a defined benefit scheme of old. Yes there’s credit risk but the prospects of having a good retirement are vastly different to most defined contribution members.

      The most stark example of this is the way they’re treated for tax purposes by arbitrarily use a factor of 20 to decide the employer payments! Show me a DC scheme or other product that uses a risk free rate of 5% by comparison.

      I sympathise with the doctor lower down but the reason you’re being taxed is because you’ve had a huge increase in your pension employer contributions above a level that society deems allowable tax free.

      If you want to moan about pensions it’s the prospect of higher rate tax payers paying some income tax on the way in and still being subject to income tax on the exit, all under the narrative of a flat “tax relief” across bands (albeit now fiscally positive for HMRC presumably).

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