Newsbrief No 45 5 June 2002

Contents 1. Appeal Court Judgement Resume. 2. Pension Scheme Investment Strategy. 3. Proposed NAPS Closure. 4. Letters. 5. Subscriptions 2002-2003.

Appeal Court Judgement : Resume`.

You will have recently received Newsbrief 44, giving a detailed report on the Court of Appeal hearing. You will also have received the letter dated 24th May 2002 issued on behalf of the Trustees.

The Appeal Court Judgment is a considerable victory that vindicates your Representative Beneficiaries decision to appeal against elements of Mr. Justice Lloyds' original judgment. It has given our members almost all the Protection and Security for our pensions that we sought.

The Appeal Court disallowed a cross-appeal by BA, and decided that: · Clause 11 is not "free-standing".

Clause 18 protects beneficiaries against any changes to the Trust Deed and Rules that may harm the rights of beneficiaries. A two thirds "super" majority of Trustees is required to make any changes under Clause 18. This is perhaps the most important part of the judgment. Your Representative Beneficiaries considered that Clause 18 does fetter Clause 11 and it was essential that the Judge's original ruling should be reversed in order to maintain the APS safeguards. It is surprising that this reversal of the original judgment was not mentioned by the Trustees in their 24 May 2002 letter to you.

· The Trustees are not permitted to use Clause 11 to return APS surplus to BA

· If the Trustees wish to make Reserves from Surplus they may, but they have to say exactly what contingencies the Reserves are to guard against and exactly how much.

· The Trustees are not allowed to leave Surplus unallocated.

Investment Strategy

Separately from the action in the Appeal Court the APS Trustees have amended their investment strategy to invest much more of the fund in index linked and fixed interest bonds and less in equities than formerly. ABAP has been asking for such a strategy change for several years. In addition the investment funds of APS and NAPS have been separated.

Proposed NAPS Closure

The closure of NAPS to future employees, and the setting up of a new Money Purchase Pension Scheme has been announced by BA. It is not known how this proposed closure is going to be handled by BA. However, if BA treat the NAPS closure in the same way that it treated the APS closure in 1984, NAPS members should be wary of a possible cross-subsidy from NAPS to the new fund in the future. Look no further than the recent happenings in the Barclays Bank pension schemes!

Letters from members.

We have received a considerable number of letters offering us congratulations on the outcome of the Appeal Court and we thank you all. One or two contained the final words as "Nil Desperandum…etc, etc" We won't, we haven't, we won.

Subscriptions 2002-2003.

At the AGM in October 2001 it was decided to leave the subscription rates and arrangements unchanged for the coming year at a rate of 50p per £1000 pension. No sub is due from those Members with a pension of less than £2000. Renewals are due as from 1st July 2002 for the year 2002-2003 to be sent to: The Treasurer 41 Linkway Crowthorne Berkshire RG45 6ES.

The Committee of ABAP 5th June 2002.