Are the BA DEP's getting the final salary pension ?

[Human Factor]

Rossi,

Be aware that employees of many companies (including BA) aren't permitted to talk to the press about company issues such as pensions, without the express permission of the company in question. Otherwise, disciplinary action may follow.

Good luck though, we need all the help we can get...

[Rossi9]

Thanks for letting me know, I was hoping someone might be prepared to contribute where they have left the company but still have a deferred pension with them. I thought this might make it easier for them to participate. You do not know anyone like that at all?

Thanks for the support, we hope it will be an important, awareness raising programme.

[AH64 APACHE]

Is it definitely 12% contribution from BA as contracts still contradict themselves. One page saying 5% from employees and 12% from BA and then others stating that BA will make up the total contribution from employer and employee to 12%?

[scroggs]

I cannot believe that BA's defined contribution scheme would pay only 12% including the employee's 5% contribution - I would suggest that there has either been a misprint or a misunderstanding.

For comparison purposes, in Virgin's DC pension scheme the company pays 15% of pensionable salary (all of basic plus all of flight pay) as long as the employee contributes 6% - making a total of 21% contributed. By law, the maximum employee contribution is 15% (to a Group rather than a Personal pension plan), making a theoretical maximum pension contribution of 30% of pensionable pay.

[AH64 APACHE]

Scroggs

Was difficult to believe - but apparently was picked up when first contracts went out - found it hard to believe that contracts were not amended to correct this. I believe that internal BA people have had letters indicating that it is definitely 5+12% - i.e 17% of pensionable pay which is 75% of basic pay.

Any thoughts on whether it would be better to opt out of the pension and do it on your own? Or do the Additional Voluntary Contributions make up for it by letting you put in as much as you want?

[expedite_climb]

AH64,

I don't know much about pensions, but how could it be better to go it alone ? 12% from the company of pensionable may be a pittance, but it is a pittance greater than zero.......

[scroggs]

Don't go it alone! You may find that the company are willing to make their 12% contribution to a private pension scheme of your choice - it's worth asking, especially if you're not happy with BA's choice of pension scheme.

As for AVCs, you can top up pension contributions via AVCs up to the limit of income as determined by the Inland Revenue. For a personal pension, this limit is age-related. For a company (i.e. group) scheme, this is 30% of salary (total of pension and AVC contributions, including company contributions). See the Inland Revenue's website for more info - alternatively, get hold of a copy of Intuit's TaxCalc which has a very useful guide to pension contributions. I'm sure Microsoft Money has something similar. If you're in BALPA, have a chat with their financial people.

[AH64 APACHE]

Scroggs et al

Thanks not intending on going alone just exploring the options. Have thought about the pension scheme of my choice but was under the impression that the majority of large companies like BA might not like the extra administration involved with dealing with lots of extra schemes.

If I have a private pension scheme from previous employers can I just transfer the old contributions into the new scheme?

Might give BALPA a ring for the BFS.

[scroggs]

If I have a private pension scheme from previous employers can I just transfer the old contributions into the new scheme?

Yes, you can usually do that without any great hassle. Duuno about BA, but I'm pretty sure Virgin will contribute directly to an alternative pension provider if you do all the legwork. I seem to remember that the only disadvantage was that your contributions weren't net of 40% tax at source, so you had to claim the difference on your tax return. Mind you, it's a while since I investigated this, so that info may be well out of date by now.

[Finger Bob]

A friend of mine is a new joiner at BA and has recently received their Pension forecast for the British Airways Retirement Plan (BARP).

Based on a 6% employee and 12% company contribution (of 75% basic pay) after 25 years service they will get ...................................wait for it ............................less than £10K a year as a pension.


Industry leading?

[AdrianShaftsworthy]

Forecast is based on their current, (i.e. joining salary), and assume no increase in salary over 25 years. Anyone with half a braincell realises BA salary increases every year plus eventual move to the LHS so a current forecast has no relation to the actual final pension!

[Finger Bob]

Actually, they assume:

1. Inflation will be 2.5% a year.
2. Pensionable pay will increase by 4% a year.
3. Future contributions will grow in line with increases to earnings.

The estimated pension is then converted to todays prices for comparison to current income.

[The Greaser]

Finger Bob - presumably your friend is ticking on in years, as my prediction from my current pension plan, which is much meaner than BA's, estimates mine at anywhere between 20000-30000.

[flyA380]

I can, by the way, confirm that in my shiny new contract it is still mentioned that the employee pays 5%. But it is totally unclear wether the 12% they mention is what BA will pay, or that BA will just add another 7% to get to the 12%.

Fact: at Martinair (owned by KLM), the company contribution is 25% of each month's basic salary. And the employee is not forced to pay own contributions if not desired.

In most airlines I hear from, the percentage (employer) varies from 8% till 20%.
And if you want, you can ALWAYS get the whole sum at the end of your career if you want. Not sure if this is possible at BA too...

Anyways: I very much like this new pension scheme for the fact that the contributions are put in a private acount of a fund. Thus cannot be touched if BA would ever be in serious trouble. What is contributed every month, is yours. For sure: that's why they call it a group insurance.
Reassuring in a hostile aviation world I'd say.
If they get the percentage (employer) up to a reasonable level (and the employee's down to a free choice) , I am happy...

[You Gimboid]

Also, if you leave BA you get the balance of your pension fund back as a lump sum.

[new_nigel777]

I've just joined BA from the low-cost world. I was quite disappointed in both the level of the pensionable pay (only 35k) and the level of contribution (17% overall), but it didn't stop me signing up.

My previous pension scheme was woeful by comparison (13% overall) although the pensionable pay was full basic salary.

Overall I calculated I will be better off due to the tax position after allowances, increase in basic salary on an annual basis, and therefore higher annual contributions on an ongoing basis, and the option / ability to increase my personal contributions over my career.

Besides that - it's BA. Who knows what could lie round the corner?