BA tries to rein in pension deficit with new scheme

BA is moving all staff to a new UK pension scheme and making its final salary scheme, which at last valuation had a deficit of £2.8bn, less generous by closing it to future accrual.

The new scheme will open on 1 April 2018, replacing the UK final salary scheme (NAPS) and the newer defined contribution scheme.

The changes are aimed at addressing the rising cost of future pension provision.

Following the closure of NAPS, members' deferred pensions will be increased annually by inflation and not influenced by salary increases.

NAPS pension members will be offered transitional bonuses including lump sums and additional pension benefits prior to the scheme being closed.  

The changes are subject to NAPS trustees agreeing to amend the scheme's rules to enable closure to future accrual.

NAPS closed to new joiners in 2003. Around 47% of BA's active employees are members.