BA could face industrial action as it plans to curb pension benefits
Updated : 12:43
British Airways could be looking at further industrial action as trade unions respond to its plans to decrease retirement benefits for 17,000 of its pension scheme members.
The proposed amendments to its defined benefits scheme (Naps) would see payments from its retirement program limited and close the scheme to future accruals, meaning staff would not see their retirement payout increase with their salary and tenure.
BA blamed low interest rates and rising life expectancy for the £3.5bn deficit in the scheme's deficit, and as a result was said to be looking to launch a new benefit scheme that would not only absorb the Naps members but would also take on the 20,000 members of its less generous contribution scheme, Barp.
Despite claiming the new scheme would yield "improved terms for the majority of UK colleagues," the carrier's announcement was met with condemnation from the trade unions Unite and GMB.
"Unite and GMB within British Airways must express on behalf of our members and in the strongest possible terms, both our dismay and bitter disappointment," a joint statement issued by the unions said on Thursday evening.
"Thousands of loyal and long-serving staff, who have helped build British Airways into a world-class flag carrier for this country and one of the most recognisable global brands, now face uncertainty in their retirement. Both unions jointly demand urgent talks to discuss both the impact of this announcement, if a solution can be found and, if not, the consequences the airline may face."
British Airways said it had put £750m in pension contributions towards the deficit in 2017 alone, "If Naps remained open to future accrual, the cost to the company of providing future benefits to Naps members could rise to 45% of individuals' pensionable pay in 2018," a number four times higher than that of the average employer contribution in UK based airlines.
As of 115 BST, shares in BA's parent company International Consolidated Airlines Group were up 0.42% to 593.00p.