Paul Spencer the Chairman of British Airway’s pension scheme has been labelled as ‘unsympathetic’ towards the thousands of pilots and engineers who challenged him recently over changes to their payments.
At a meeting of members of the Airways Pension Scheme (APS) at Ascot Racecourse last week, some 2,000 members challenged Spencer over the decision of trustees to link pension payouts to a lower rate of inflation than before, thereby slashing their value by up to twenty per cent. Many of those in workplace schemes have found themselves in a similar situation. If you want to secure your pension plan through additional savings talk to a qualified independent advisor by filling in our pension enquiry form.
The B.A scheme has decided to follow the government’s lead and switch their method of calculating inflation from the more generous RPI (Retail Price Index) to CPI (Consumer Price Index) which generally calculates inflation at a much more meagre rate.
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Three of the scheme’s trustees have already resigned over the controversial move to CPI and have threatened court action unless APS “reconsider its position”.
Pensioners at the mass meetings at Ascot have accused trustees of not acting in the members best interests, and there were several angry exchanges between the chairman and furious pensioners.
Mr Spencer said that the government’s switch to CPI had forced their hand, and the APS board would have to answer “questions” from the pension’s regulator and shareholders if they continued to pay RPI whilst the scheme was operating at a deficit.
He told members,
“The prime duty and responsibility of the trustees is to secure the benefits you are entitled to as defined by the scheme rules. This means not what you were expecting to get but what you are entitled to.”
He went on to promise the board would pay RPI, or boost CPI based payments, “as soon as we believe it is prudent to do so”.
“Conflict of interest” amongst APR trustees
Members rejected Spencer’s arguments, claiming a “conflict of interest” within the APS board as 5 of its 12 trustees are also trustees on B.A’s scheme which “needs money from APS”
Retired pilot, Mike Post, leading the campaign to reject the switch to CPI said,”[Mr Spencer] was not at all sympathetic. Ultimately we will end up in court. The trustees haven’t acted in the best interests of the beneficiaries.”
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