Employee Rewards and Benefits News
Pensions deal agreed between BA and unions
British Airways has announced a deal with employees over its pension scheme in order to address the £3.7 billion deficit which is currently the biggest obstacle to its planned merger with Iberia.
Striking the deal with three national trade unions representing staff from the firm, the deal will move the cost of providing pensions on to employees.
As a result of the good news, shares in the company jumped and is providing more hope for investors who are keen to see the airline strengthen its ties with proposed transatlantic partner American Airlines.
BA workers will pay up to £37 million more into the pension scheme each year if they want to maintain their benefits levels, meaning that contribution rates will rise from 8.5 per cent to 13 per cent of pay for anyone wanting to leave at the age of 60, the Financial Times revealed.
The company told the publication: "It reduces the cost of funding future benefits and therefore means we can allocate more of our current £330 million [annual] cash contributions towards paying down the deficits."
Unite-affiliated workers are still threatening to strike, despite condemnation from Lord Adonis and Gordon Brown.
Posted by Michael Ewing
