British Airways has closed its defined benefit (DB) pension scheme and its defined contribution (DC) pension scheme and will replace both with a new DC scheme. British Airways’ New Airways Pension Scheme (NAPS) has been closed to future accrual, while the British Airways Retirement Plan (BARP) closed to future contributions on 31 March 2018. The schemes have been replaced by a flexible benefits scheme, which will establish a new DC section called the British Airways Pension Plan (BAPP).
It is anticipated that BAPP costs will be around £80 million lower than its predecessor schemes and will offer members a choice of contribution rates and an option to draw down cash instead of a pension. Existing NAPS members were given transitional options including cash transition costs paid directly or into the pension account. Scheme liabilities saw a decrease of £770 million prior to closure by reason of scheme members choosing non-cash transitional options in a bid to bolster their NAPS pension. However, British Airways has pointed out that the reduction does not change the recovery plan. The next full NAPS actuarial valuation was due on 31 March 2018.