[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Thursday, 23 March 2006, 18:24 GMT
BA set to raise staff pension age
Tailfins of BA planes
BA plans to raise the retirement age for staff
British Airways plans to raise the retirement age for some of its workers in a bid to close a 1bn black hole in its pension scheme.

Under the proposals, the compulsory retirement age for pilots and cabin crew will rise initially to 60 from 55.

However, within five years, the retirement age for BA cabin crew will rise to 65, the airline told unions.

Willie Walsh, BA chief executive, said the change "will provide competitive, affordable pensions for the future".

We still don't really know if today's measures will be the right ones for our members and for the scheme
Brendan Gold, T&G union

The decision to raise the retirement age for staff will cut the company's pension deficit by an estimated 450m, the airline said.

In addition, the airline promised to pay an extra 500m into the pension scheme once the changes had come into force. It pledged that the company's lucrative final salary scheme would stay in place.

But the 500m payment into the pension fund is conditional on staff accepting later retirement.

BA staff are also being asked to accept a cap of 2.5% on annual increases to their pension income in retirement.

Union caution

Unions reacted cautiously to BA's plans.

"It was no secret that BA's pension funds were in deficit, but we still don't really know if today's measures will be the right ones for our members and for the scheme," Brendan Gold, T&G union national secretary, said.

Mr Gold added that BA should not put conditions on the proposed 500m pension top-up as it had already made savings of 800m by slashing 13,000 jobs.

After rising in early trade on the London market, BA shares closed unchanged at 360.75 pence.



SEE ALSO
BA to axe one-third of managers
30 Nov 05 |  Business
Gate dispute cost BA up to 45m
04 Nov 05 |  Business
New boss as BA faces turbulence
02 Oct 05 |  Business
Fuel surcharge lifts BA revenues
05 Aug 05 |  Business

RELATED INTERNET LINKS
The BBC is not responsible for the content of external internet sites



FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

PRODUCTS & SERVICES

Americas Africa Europe Middle East South Asia Asia Pacific