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NewsBrief 115, is available for download by clicking here.



Beddoe Judgment Handed Down: APS Trustee may spend £1,034,000 on the Appeal to the Supreme Court

The APS Discretionary Increase Supreme Court Appeal Beddoe hearing judgment was handed down this morning. The full judgment can be found on the ABAP website. The Judge has ruled that the APS Trustee may use APS funds to appeal to the Supreme Court but has capped the amount that the Trustee may spend at £1,034,000. So the appeal will now proceed.

Paragraph 1 of today's judgment observes: "Very unusually, the Court of Appeal granted the Trustee permission to appeal to the Supreme Court". We believe that such an immediate grant of permission is a good sign for the appellants.

The Trustee had estimated its costs of the appeal to the Supreme Court as £1,239,063 of which it had already spent £444,033. The capped sum of £1,034,000 was arrived at because it was the amount that BA had informed the Court that it estimated would be the cost of defending the appeal.

The Judge has pointed out that the Trustee has already spent £12,863,666 on the Main Proceedings and has assumed that BA has spent a similar amount. However, the reason that the Trustee was obliged to spend so much money defending the case in the first case was BA's ignominiously failed prolonged attack on the behaviour of the APS Trustees and their advisers which took up the vast majority of the six weeks of the Main Proceedings in 2016. The Trustees and their advisers were completely exonerated of any bad behaviour and the Scheme Actuary was praised by the Judge as an actuary of outstanding ability. Given the then Judge's criticism of BA's behaviour in the 2014 Beddoe hearing, in which BA failed in its attempt to make the APS Trustees individually liable for adverse costs in the Main Hearing, it is also a matter of note for APS beneficiaries that in this latest Beddoe hearing BA completely failed in its proposal that APS beneficiaries should bear the risk of paying adverse costs in the Appeal to the Supreme Court.

It is a great relief that the Trustee will now be able to appeal to the Supreme Court and Mark Fielder is to be thanked for his role as APS Representative Beneficiary.

A report of the Beddoe hearing judgment has been made in the Other News Section of the MyBA Pension website but curiously no mention is made of the cap on the Trustee's legal fees.

The full version of the judgement can be found here




APS discretionary increase: BA appeal result

Disappointingly, BA has won the appeal against last years judgement, with the exception of the point that it was a benevolent or compassionate payment.

"British Airways (BA) will not have to pay a £12m discretionary benefit its trustees had unilaterally granted, the Court of Appeal has ruled. In its judgment issued today (5 July), the court accepted the airline's arguments that trustees of the Airways Pension Scheme (APS) had acted for an improper purpose when granting the 0.2% discretionary increase in the 2013/14 financial year. While there was one dissenting judge, the other two judges agreed with BA that the trustees had acted outside of their powers by granting the
increase."

ABAP have responded to the result. That document can be downloaded
here, and on the same page there is a copy of the full judgement.

You can also read more on the Professional Pensions website,
here.

Investment & Pensions Europe (IPE) have also reported. Link
here.



BA Pensions "In Focus"

The latest BA Pensions "In Focus" publications are available for APS & NAPS.

For NAPS it's at
http://www.mybapensiondocuments.com/IF/NAPSP2018

For APS it's at
http://www.mybapensiondocuments.com/IF/APSP2018

Most recent funding levels show NAPS as 82.7% funded with a £2.8bn shortfall (2015) and APS as 91.5% funded with a £680m shortfall (still 2012, as the 2015 valuation awaits the result of BA's appeal).

There's some useful information within the documents. When viewing the document online, clicking on the spanner (top right-hand corner) will give you an option to download a PDF. That may be the best option as reading online can be clunky, particularly if the speed of your internet connection is poor.



NAPS closure to future accruals.
Two major questions are posed by BA’s decision to stop NAPS for further accrual from 1st April 2018.
• What is the best of the various Defined Contribution (DC) options?
• How does this proposed DC scheme compare with NAPS as far as contributions and resulting pension are concerned?

To help answer these questions, we have built a simulation model. Before following the link to the documents and spreadsheet please take careful note of these health warnings:

Nothing in the documents or spreadsheet should be taken as constituting individual financial advice. It is a summary of results from a mathematical simulation based on the NAPS rules, the proposed DC scheme and Office for National Statistics Life Expectancy tables. The simulation has been prepared to give you a better understanding of the potential impact of the newBARPS options.

The spreadsheet itself is built in Microsoft Excel. Not everyone has a copy, and we apologise in advance to any members who do not have access to this software themselves.

The topic itself is complicated, and the devil is in the details. Your circumstances are unique to you, and to ensure that you understand which of the available new BARPS options would produce the best outcome for you, you should consider taking financial advice.

The documents and spreadsheet can be found here:



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