BA faces £2bn pensions fund deficit

Last updated at 14:03 29 September 2006


The pensions deficit facing British Airways is set to more than double to more than £2 billion despite a recovery of the stock market, the airline announced.

Annual contributions of almost £500 million would be needed to fund the pension scheme unless changes to future benefit were introduced, it was warned.

BA said proposed changes included raising the retirement age to 65 and capping pay rises to the rate of inflation.

BA bosses met union officials to discuss how it planned to tackle the huge pensions black hole, which it announced was set to rise from £928 million to £2.1 billion.

The airline said it would be keeping its final salary pension scheme, with no increase in staff contribution rates and no changes to pension benefits already earned.

Once the changes were accepted, BA said it would make a £500 million one-off payment to reduce the deficit.

GMB national officer Ed Blissett said: "GMB will not accept raising the retirement age to 65 for those who expect to go at 60. Neither will GMB accept raising the contribution rates for existing staff."

The union said it planned to table counter-proposals to manage the pensions fund deficit.

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