NAPS Trustee agrees 12 month deferral of deficit recovery contributions

The NAPS Trustee and BA have concluded an agreement to defer £450m of deficit recovery contributions (DRC), effective from October 2020 to September 2021.  While BA was initially able to maintain DRCs at the previously agreed level,  successive interim deferments have been agreed from October onwards. This has now been formalised into a full 12 month DRC deferral backdated to October 2020.  The deferred DRCs plus interest will be added to the end of the current recovery plan, which is due to end in 2023. In addition to this, BA has provided £450m worth of assets as security and the Trustee’s advisers have determined that this provides a sufficient level of protection until the deferred DRCs can be repaid.  The Trustee has concluded “With the subsequent announcement of further domestic and international travel restrictions the Trustee’s position remains that there is a genuine need to offer support to BA.”

This agreement is one of two financing agreements that will provide BA with £2.45bn of liquidity. £2bn comes from a loan underwritten by a syndicate of banks, partially guaranteed by UK Export Finance (UKEF).
IAG’s financial update on the agreements can be found here:

At the last Triennial valuation in 2018, NAPS had a technical provisions deficit of £2.4bn, Since then £1.6bn of DRCs have been made by BA. A further Triennial valuation is due on 31st March this year which will provide an updated view of scheme funding.

A revised recovery plan has been agreed now ending in April 2024 (previously April 2023), with payments due of  £450m by 31st March 2023,  the deferred £450m by 31st March 2024 and a final interest payment of £36.3m in April 2024.

The Trustee’s announcement can be found here:

entitled “Deferral of BA’s deficit reduction contributions to NAPS – 22 February 2021”

The supporting Scheme documents can be found here:

entitled “New Airways Pension Scheme Recovery Plan – February 2021”

and “Schedule of Contributions and form of actuary’s certification – February 2021”