BA Pensions - the trustees of British Airways scheme - has temporarily suspended providing pension transfer values for active members, with the goal to protect service levels while it consults on the future of defined benefit (DB) scheme New Airways Pension Scheme (NAPS).
In a statement to its members, the company said: “There is no requirement to provide a transfer value to members who are still building up benefits in the scheme, although we have, until now, provided these to all active members on request.
“The decision to suspend the provision of transfer values is driven solely by the desire to maintain service levels across all categories of the membership during an exceptionally busy period.”
This suspension excludes requests from active members for divorce purposes, and it is also applied to Airways Pension Scheme (APS), BA other final salary schemes.
In September, BA announced proposals to close NAPS to future accrual, and move its 17,000 members to a “more flexible” retirement fund.
Once in the new scheme, staff would be able to choose between a non-contributory option, higher employer contributions than under the existing defined contribution scheme or the opportunity to take the employer contribution as cash.
Trade unions Unit and GMB have threatened industrial action over the closure of the pension scheme.
Since 2003 BA has pumped £3.5bn into NAPS, but the deficit was estimated to have risen to £3.7bn by March this year, when measured on an accounting basis.
The 2015 formal actuarial valuation put the NAPS deficit at £2.8bn.
BA said: “If the outcome of BA’s consultation is closure of NAPS to future accrual, you will be provided with a statement showing your NAPS pension at date of closure and the transfer value of this pension.
“The transfer value will be guaranteed against changes in market conditions for a period of three months. We will aim to provide the statement within two months of the date of any closure, once the necessary payroll data has been received from BA.”
According to Tom Selby, senior analyst at AJ Bell, “given the uncertainty surrounding the NAPS scheme the trustees clearly felt protective measures were needed to ensure members who want to transfer receive a service that is up to scratch”.
He said: “It's vital anyone giving up their DB benefits is fully informed of the implications of the decision.
“Suspending transfer values temporarily to give space for this information to be provided accurately and in a way members understand seems to me a sensible and pragmatic approach.”
maria.espadinha@ft.com
