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The trustees of British Airways’ pension schemes have agreed to outsource all directly managed assets to BlackRock in the largest OCIO deal to date in the UK, bringing to an end one of the country’s most experienced independent in-house teams.
The move means dramatic changes for the 42 members of the BA Pensions in-house team, many of whom have been in place for well over 10 years.
Employees of provider British Airways Pension Investment Management Limited (BAPIML), including CIO David Stewart and deputy CIO John St Hill, have transferred to BlackRock, alongside some from the administration unit. The property team under Paul Scott also transfers to BlackRock, as reported by our sister publication IPE Real Assets.
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Tuesday 20 April 2021 7:40 am BA looks set to recover from Covid crisis, so why are its 40-something pilots giving up their gold-plated pensions?
In turbulent times, when the future of a company is being called into question, it is not uncommon for staff to transfer out of their employer’s defined benefit (DB) pension scheme, if they have one.
Although seen as “gold-plated”, some DB scheme members worry about their scheme falling to the pension lifeboat fund, and that they will lose money as a result.
This has been the case at British Airways in recent months. Pilots in particular have been transferring out of the scheme for a number of years and for a variety of reasons, however in the last year, when the coronavirus hit airlines particularly hard, the viability of the company became another factor for those considering transferring away from the pension.
Last modified on Mon 22 Feb 2021 16.49 EST
British Airways has struck a deal to delay £450m of pension deficit contributions as the company struggles through Covid travel restrictions that have left most of its planes grounded during the pandemic.
The carrierâs owner, International Airlines Group (IAG), has also reached a final agreement over a £2bn loan that will give the company a larger financial cushion until Covid restrictions are eased.
BA, which usually pays £37.5m a month into the New Airways Pension Scheme (NAPS), has struck a deal with trustees that will allow it to delay its contributions until September 2021. The airline was allowed to temporarily suspend its payments throughout negotiations, meaning it has not been contributing to the scheme since September last year.