NEWSBRIEF No 80
15th April 2010
Contents
1. New Independent Trustee Chairman
2. Pensioner Trustee Election
3. 2010 Pensions Increase
4. Scheme Deficit Update
5. VPO Update
6. Increase in Pensioner Trustees APS & NAPS
7. To Paris & Back: Peter Smith
8. Help for Heroes.
1. New Independent Chairman of Trustees ( Dayne Markham)
ABAP has great pleasure in reporting that British Airways plc has appointed Mr Paul Spencer, CBE as the first external independent Chairman of BA Pensions Trustees Ltd. His appointment was effective from the middle of March 2010. He currently holds appointments on the Boards of Trustees of BT Pensions, the British American Tobacco Pension Fund, & the Rolls Royce Pension Scheme. He has also served in executive & non executive positions on the Boards of several listed companies.
As all pensioners realise, this strong appointment has come on side at a crucial time for us with the ongoing Triennial Valuation; the interlinked deficit recovery; and the safeguarding of BA Pensions assets from any permutation of events in the Iberia Merger - now or in the future.
ABAP has requested an early informal meeting with Mr Spencer.
Members will remember that the ABAP call for an Independent Trustees Chairman was seen world wide on the internet in late November 2009.
2. APS Pensioner Trustee Election: Captain Cliff Pocock Elected
ABAP congratulates Cliff Pocock on his re election for a third term. We thank all APS pensioners who voted in this election especially those supporting Captain Pocock.
The actual result is as follows, the number of votes for each candidate in brackets:
Captain Cliff Pocock (7610)
Mr Robert James (1061)
Mr Ken Reid (605)
Mr Aidan Brown (537)
Mr Fred Moss (437)
During the election many ABAP members who are widows complained that they are disenfranchised by being unable to vote for Pensioner Trustees despite now receiving a BA pension that they in truth indirectly earned. ABAP is progressing a rethink on this matter by the Trustees.
3. 2010 Pensions: Increase for Cost of Living (Dayne Markham, In Focus)
As intimated earlier by ABAP there will be no pension increase in 2010 for those in receipt of a BA pension. But the reason has nothing to do with the current deficit position of both schemes. The Government takes the month of September’s reading of the retail price index (RPI) for the pension increase for the following year starting in April. In September 2009 this figure was -1.4%. However, at least our trust deeds do not permit a pension decrease. So the level of our pensions is held as for year 2009/2010 for year 2010/2011. It is worth remembering, before tightening our belts, that in 2009/2010 we received an increase of +5% which that year turned out in favour of the pensioners. Slight confusion has been caused as the State Pension will receive a small increase for 2010/2011, but that is at the whim of politicians. BA pensions are governed by the Trust Deeds.
4. BA Schemes Pension Deficit: Update (Dayne Markham, Mike Mcdonald)
The current scene remains indefinite because the ingredients are dependent on each other for the whole deficit solution to become accurately calculated for the way ahead.
Firstly, the triennial valuation of the schemes taken in March 2009 was at the low point of the markets. Any remedial action may take into account improvements in the markets since March 2009. The remedial action then cannot be started until the valuation is complete.
Secondly, this remedial action has to be approved by the Pensions Regulator in detail. The Regulator has also to agree the size of the Deficit before the recovery details can be approved. BA Pensions have satisfy the Pensions Regulator on all points.
Thirdly, this interdependence will probably prevent finality until late summer (if the Regulator grants a delay on finalising the scheme deficit) on any proposed changes in the schemes for current employees. You will be aware from the Press that British Airways has proposed changes to future accrual for existing employees. But BA & the Unions have yet finally to agree. Pensions already in payment are not affected.
Fourthly, the approval of the schemes deficit is one precondition for the BA merger with Iberia Airlines. An intermediary signing “in pencil” took place recently to remind interested parties that the deal was still "on" despite the delay. It is relevant that the proclaimed advantages of the Merger have yet to be substantiated. To this end we would expect the Pensions Trustees to ensure through their own advisers that the schemes assets remain secure whatever happens now or later to “International Consolidated Airlines“ – the new name for Topco, the controlling company of the merged airlines
5. VPO (Variable Pension Option): Update ( Dayne Markham)
The VPO complaint is lodged with the Pensions Ombudsman as the multi-item sub-complaints are considered. The final piece of validation, as Members will recall, is the individual complaint to BA Pensions by a recent VPO pensioner. This has to be turned down by BA Pensions, after due consideration, in the same way that all previous VPO complaints have been and then added to the VPO complaint already lodged, to complete the case to the Ombudsman. Despite the apparent delay caused we are professionally assured that in fact no additional time is taken as other work on the complaint is proceeding steadily meanwhile.
6. Increase in APS & NAPS Pensioner Trustees ( Dayne Markham)
ABAP has repeated its request for an early solution to the imbalance of Member Nominated Trustees (MNTs) in both schemes because the earlier request to the previous chairman although helpful was not specific enough on what was intended. The new Chairman of Trustees Mr Paul Spencer has made a rapid response to our request explaining that the matter will be considered by the Trustees Governance Committee in June & September 2010. ABAP notes these dates & will request that the Imbalance Correction of MNTs in accordance with the 1997 Pensions Act be placed on the Agenda for the full Trustee Board quarterly meeting at the end of September 2010.
Meanwhile, like a running out hourglass the Active members of the closed Schemes continue to dwindle away to become Pensioners, increasing the imbalance.
7. To Paris & Back: Mr Peter Smith ( George Bell )
Many Members will remember Peter Smith who was with BA industrial relations & BALPA for some years in the 80s & 90s. He was most helpful in the pensions scene at that time. He has recently gained remission from cancer and is cycling to Paris and back on 2-6 June 2010 to raise funds for the Marsden Hospital.
Any Member wishing to support his ride please send their contributions, payable to: The Royal Marsden Cancer Campaign, 6 Howden Road, London, SE25 4AS
If you are a UK tax payer please mention that you request Gift Aid to increase your support by 28%.
8. Help for Heroes (Dayne Markham)
ABAP makes no apology for promoting this spontaneous charity that is now supported by many companies in this country and has raised £45m so far.
The poignant comparison is very real between ourselves having survived safely to enjoy our pensions and those who are young becoming shattered in keeping us safe to do so. Interestingly, in February while sympathising with this cause, BA pensions felt unable to permit (at no cost to the scheme) the loose insertion of the H4H pamphlet in their “In Focus” pensions report as it was not “a pensions related issue”.
The Committee of ABAP 15th April 2010.