The US Government…..for creating an unbalanced playing field and perpetuating the existing excess capacity in the airline business, meaning nobody makes a profit, and forcing otherwise profitable companies, like BA, to slash the terms and conditions of their employees in order to remain competitive.
BA should approach the UK government and get them to levy a fee for every subsidised airline that enters UK airspace until foreign governments level the playing field, rather than attack UK employees T&C’s.
The expected returns to the Equity portion of our pension fund (85% of the fund at the time) were in hindsight, set to unrealistically high levels. This meant BA effectively underpaid into our Pension fund during those years and why BA’s contributions to our Pension is now 5 times that of the employees; to pay back this interest-free loan they have enjoyed from our Pension. This underpayment is not called a Pensions holiday. ;0)
The rate on Gilts is currently at a 300-yr low. This low rate is likely unsustainable and will at some point return to the higher long-term average along with inflation. Our Pension deficit will reduce as the interest rate rises. Bank managers aren’t exactly giving 300yr fixed mortgages at this rate are they ?
BA are paying extra into our Pensions, but they also want to return to paying dividends to shareholders (£150m/yr) and buy new planes (£8bn). BA are currently paying off £1.2bn of their debt every year, roughly equal to our Pension deficit of £1.2bn. One years worth of these payments would zero our deficit.
BA want to……………. increase members contributions. build our pension slower. restruct pensionable pay. increase retirement age. move to a career average pension. move to our defined contributions scheme.
Yes, in real terms these proposals would mean………. In order to buy an annuity to offset the amount of annual Pension lost in BA, due to a move to Career earnings Pension, a 10yr SFO would have to save a £500,000 lump sum. Most employees would lose 30% of the Pensions they were promised when they joined BA if any of BA’s proposals are accepted.
From BA’s last results………. Profit before tax +65.3% Net Asset +73.4% Operating Profit +36.4% Cash equivalents and short term deposits at £1936m, up £254m from March till June. Borrowings down £395m since the beginning of the year until June. This is about PROFITs………….. …………..not BA’s ability to pay !!!!
BA managements Pensions are affected by the new lifetime Pension CAP in the UK so they have less to lose by the Pension changing and will seek alternative pay arrangements. BA have announced that mgmt variable pay is now altered “to increase the emphasis on the achievement of short-term bonus.” As such, their bonus’ this year have the potential to double or triple, whilst our Profit share goal posts have moved further away.........Time to talk ?
Centrica paid 33m to help meet a 61m shortfall. Yell tops up its pension plan, eliminating it’s 64.8m pound deficit. BAE Systems is planning to inject 500m into its pension fund. Alliance & Leicester paid £152.9 million in 2004, including a one-off contribution of £114 million. This helped to reduce its FRS17 deficit by two-thirds. Scottish & Newcastle paid £200 million. Royal Bank of Scotland paid £1,145 million. Others include: Royal Mail, ICI, National Grid T, Kingfisher, Whitbread.
Call BALPA immediately to tell them how you feel. The union is only as strong as our weakest link. We can say NO this time. Attend the Pension briefings and let the managers know that you won’t take the biggest threat to your Terms and conditions in decades sitting down. Pass on the info in this presentation to every BA employee that you know and ask that they do the same. Be sure they know that the proposed changes to our Pensions are massive long-term. Email your managers directly and let them know how strongly you feel.