British Airways has two pension schemes. The Airways Pension Scheme (APS) formed in 1948, and the New Airways Pension Scheme (NAPS), formed in 1984. When NAPS commenced, APS was closed to new members. NAPS is now also closed. Both schemes had 12 trustees, 6 appointed by BA and 6 by the beneficiaries (all employees) of the appropriate scheme. There was originally no pensioner representation.
Some small groups of pensioners requested pensioner representation on the Trustee Boards. This was rejected by BA, but BA did agree to a Liaison Council, which could discuss welfare, staff travel and pension matters with BA officials. This Council was entirely dependent upon BA, and was purely for consultation: it had no powers or funds.
There were at least two small groups who were dissatisfied with aspects of the pensions schemes, and who had been writing without success to the Pension Trustees.
Then in 1989 the Triennial Valuation of APS disclosed a "Disposable Surplus" of £494m. BA benefited from a "Contribution Holiday" which lasted until 2002, and instructed the trustees to implement benefit improvements for employees. BA rejected appeals for some benefit from the surplus to be granted to pensioners.
This brought the two independent groups together. The Chairman of the Liaison Council, who had also unsuccessfully asked BA to give benefit improvements from the surplus resigned, and BAPA (British Airways Pensioner Association) was formed, in 1990. This association, which later became ABAP to avoid confusion with BALPA (British Airline Pilots Association) commenced raising funds, and as a result referred the pensioners' case to the Pensions Ombudsman.
The Ombudsman found that the Trustees were guilty of not even considering the pensioners' interests when disposing of the "Disposable Surplus" and instructed them to reconsider. This the Trustees did in 1995, but decided to make no benefit changes to pensioners.
ABAP continued to press the pensioners' case, to no avail, and also joined the Confederation of Occupational Pensioners as a founder member to lobby Government on pension changes, including getting pensioner trustees on to the Trustee Boards. Following changes which gave limited pensioner representation, ABAP campaigned with the BA Pension Trustees and BA, and was successful in getting 2 pensioners elected as trustees on APS. This representation has now increased to 4 pensioner trustees on APS and 1 on the NAPS Trustee Board. ABAP then campaigned trying to persuade the APS Trustees to adopt an investment policy more suited to a closed, mature scheme. Over the years the Trustees of APS gradually moved investments to a more balanced portfolio.
In 1999 BA advised the Trustees that it wished to merge APS and NAPS. The proposal was based on the fact that the age profiles of the two schemes would be reduced, which would allow a greater proportion of the funds to be invested in equities. BA also proposed some benefit increases for pensioners, with those who had been pensioners before 1989 (who had been refused any increase in 1989) receiving a slightly larger percentage increase than the post 1989 pensioners.
ABAP, together with representatives of the active employees, successfully campaigned against this proposal, which was temporarily abandoned in late 2000.
Part of the debate on the merger centred around Clause 11 of the APS Trust Deed. The Trustees decided to refer this to the Courts for clarification, and ABAP was asked and agreed to appoint a Pensioner Representative Beneficiary. A similar representative was appointed by the active members. The High Court heard the case of the Trustees, BA, and the Representatives in 2001. The pensioner representative, after consultation with the legal advisers, requested an appeal against certain parts of the High Court decision. Both Trustees and BA were willing to accept the decision if the Beneficiary Representatives would agree. They did not, and the matter was referred to the Appeal Court in 2002. The Appeal Court reversed part of the High Court decision in favour of the appellants. Neither BA nor the Trustees appealed this decision.
Since then ABAP has continued to campaign on pensioner issues, and to keep a close eye on all BA pension matters.