New figures from BA show that the actuarial deficit in its pension scheme is set to rise from £928m ($1,748.5m) to some £2.1bn ($3.96bn) despite the doubling of airlines contributions and a recovery of the stock market.
The trustees have confirmed that annual contributions of ”497m ($936.2m) would be needed to fund the scheme unless changes to future benefits proposed earlier this year are introduced. This means the company's contributions would go up from five to 12 times members' contributions.
Negotiations between British Airways and the trustees are now underway to agree a funding plan including proposed benefit alterations. The changes, which are also being discussed with trade unions, include raising the normal retirement age to 65, a slower accrual rate, inflation capped pensionable pay increases and capped pension increases on retirement at 2.5%.
The airline says it wants to share the impact of changes in life expectancy. The proposal keeps a final salary scheme with no increase in staff contribution rates and no changes to pension benefits already earned.