A third trustee of the British Airways pension scheme has resigned in protest at a decision to link payments to the lower of two official measures of inflation.
Graham Tomlin, a trustee of BA’s Airways Pension Scheme (APS), quit on Friday complaining the scheme had become “a political football, with our beneficiaries paying the price of governmental interference”.
The APS is the older of two BA final-salary pension schemes, both long since closed to new staff.
BA recently won the backing of a majority of trustees to link increases in pension payments to the Consumer Prices Index (CPI) – currently 4% – rather than the Retail Price Index (RPI) which is 5.3% at present. This followed a similar move by the government in relation to public sector pensions.
Tomlin’s resignation follows that of Clifford Pocock, a member-nominated trustee of the APS, who resigned last Thursday. In a statement, Pocock said: “APS is a well-funded scheme.”
A third trustee, former BA Captain Mike Post, stood down on April 3, complaining in a letter to the Daily Telegraph: “The effect on APS pensioners will be severe.” Post said the switch amounted to a “transfer of £770 million from BA pensioners to BA shareholders”.
The change is forecast to cut BA staff pension pots by 20% and comes with talks to prevent further action by cabin crew poised at a delicate stage.
BA has sought repeatedly to cut the costs of its staff pension schemes. The airline won significant concessions from unions, which agreed a package of increased contributions and reduced entitlements in March last year, and in June it persuaded the trustees to surrender bank guarantees that would pay out if BA went bust.
The APS closed to new BA staff in 1984 and was replaced by the New Airways Pension Scheme (NAPS), which closed to new members in 2003. But NAPS still had 30,000 staff members last year. Together the schemes ran a deficit of £3.7 billion in 2010.