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The Actuary The magazine of the Institute & Faculty of Actuaries

The world’s favourite pension deficit

British Airways and Iberia move closer to sealing a union under the brand name ‘International Airlines’ with details of the integration of their companies. Still in the tail lies the sting of the pension deficit and the attitude of the Pensions Regulator, on whose consent the deal still rests. Meanwhile, the employees have a deal with BA that represents a significant hike in costs as the price for retaining existing conditions in full. Contribution rates, already fairly high at 8.5%, will have to rise to 13% to protect the retirement age of 60. Although this is a very high cost, at least for BA employees, they are not facing the closure of their future accrual, an action which so many employers have taken.