British Airways has seen a £100 million increase in the deficit of its two defined benefit (DB) pension schemes since 2010.
The combined technical deficit at 31 March 2012 was £3.3 billion, compared to £3.2 billion at 31 March 2010.
The increase is due to a reduction in the interest rates used to discount the schemes’ liabilities, according to the airline’s latest triennial valuation.
British Airways has reached an agreement with the trustees of the Airways Pension Scheme and New Airways Pension Scheme. It confirms that the existing contribution plans remain on track to repay the pension liabilities.
The main terms of the agreement are:
- There will be no change to the existing contribution arrangements, which were agreed in 2010.
- British Airways has the ability to move to normal dividend payments over time.
British Airways will continue to make additional pension deficit contributions if its cash balance at 31 March in any year exceeds £2 billion.