British Airways (BA) has switched the investment options available through its trust-based defined contribution (DC) pension scheme in order to lower pension scheme charges.
Under its new arrangement, provided by BlackRock, the annual management charge (AMC) will reduce from 0.23% to 0.15%.
Since its auto-enrolment staging date in January 2013, 13,500 of the airline’s employees are members of its DC scheme. Its contribution levels are set at 1% for employees and 2% for the employer, with the option to increase these to 5% employee contribution and 7.5% employer contribution for most staff, rising to 6.5% and 12.6% for senior management.
A BA spokesperson said: “The British Airways Retirement Plan (BARP) remains an unbundled trust-based arrangement as it has since 2003, using a third-party administrator and other external advisers.
“As the BARP scheme grows in numbers, British Airways and the pension trustees are continuing to seek opportunities to deliver value for members.
“Following best practice, a thorough investment strategy review was carried out and, as a result, BlackRock was chosen to provide investment platform services to the plan.
“This will result in the benefit of lower charges for members.”
