A British Airways pension fund trustee has resigned after the airline switched to calculating payments against a reduced measure of inflation, it has emerged.
The Airways Pension Scheme (APS) board of trustees have voted for pensions to be calculated based on the consumer price index CPI rather than the retail price index, which is expected to be around 1% higher for the next five years.
This came nine days ago before Mike Post, who has previously warned of how this change would impact on the payments of retired BA workers, decided to quit his position on the pension fund scheme.
CPI payments this year will see retired BA staff receive a 3.1% increase, as opposed to the 4.6% they would have expected based on inflation figures for last September.
The move was reported to have caused “considerable anger” among BA pensioners and The Sunday Times said the Association of British Airways Pensioners has called for a public meeting likely to be held in the next few months.
The BA pension scheme is currently £3.7 billion in the red and the change to CPI is calculated to help cut this by £770 million. APS is the older of the two pension schemes BA operates.
In last year’s emergency budget following the general election chancellor George Osborne made the same switch for public sector pension schemes to a CPI-based system which excludes mortgage costs.
Private firms follow the lead taken in the public sector and this prompted other firms, including BT, to make the same switch. Post was said in reports to have declined to comment.