Newsbrief No 57
Contents
1. AGM 14th October 2004.
2. Membership Cards 2004-2005.
3. ABAP Accounts 2003-2004.
4. Treasurers Postal Address.
5. Pensioner Trustee Election.
6. Variable Pension.
7. Future Pension Increases at More Risk.
8. 2004-2005 Subs Reminder.
1. AGM 14th October 2004. 2pm Concorde Centre. Heston.
You have already been notified about the AGM. But before delving into this Newsbrief you are cordially reminded to bring an APS or NAPS friend with you. Ideally an ex BA ABAP Non member. But if you cannot manage that then bring along another ABAP Member to help make the occasion.
2. Membership Cards 2004 - 2005.
Members whose 2004/2005 subs have been received should find their new Blue Cards for this year enclosed. If you have paid and not received your card after due allowance for the Mail, then your card will be with the next Newsbrief due after the AGM.
3. ABAP Accounts 2003-2004.
The Accounts for 2003-2004 are available but not posted on this site. If you would like a copy please contact the Secretary.
4. Treasurers Postal Address
Many of you have noticed the house number error in the postal address for the Treasurer printed on the subscription 2004-2005 renewal form. Thank you to all those who warned us of the error
The Treasurer has not moved and is still at:
41 Linkway
Crowthorne
Berkshire RG45 6ES.
The neighbour who received large quantities of ABAP Mail has accepted our full apologies and presentation for this Gremlin mis-numbering.
5. Pensioner Trustee Election.
The result of this Election will be available at the end of September, and will be included in the next Newsbrief. Many have asked why a "double whammy" Election Postcard was sent out by the Association. It was repeated following numerous calls from Members who had not found the first card in the AGM envelope. This way was used as an attempted postal economy. In future all cards will be sent separately as before.
6. Variable Pension.
We wrote to the Chairman of Trustees on 25th February 2004 requesting a review of the Variable Pension option. The letter contained updated information on the repayments made by those Members who had supplied details to us, and detailed the arguments why this option should be changed. We had a reply from the Chairman advising that this would be discussed at the Trustees meeting on 25th March 2004.
We heard nothing further until we received a copy of the Minutes of the Trustees Meeting in late July, when we read that the Trustees had indeed considered the matter. Regrettably they decided to make No Change.
Rather surprisingly the minutes state that when they reviewed the option in 2003 it was estimated that the cost would be £15-£20m. These estimated costs had been updated, and it was considered that the current cost would be £25-£30m. (If our memory is correct, the cost in 1998 was said to be £10-15m.)
We wrote to the Chairman of Trustees again on 22nd July 2004, pointing out that the Option was supposed to be financially neutral. This had been confirmed in the "Stop Press" of the BA Pensions leaflet In Focus, issued in Sept. 2001. We asked how the "Cost" could escalate by a massive £10m. in one year. (this comes out at around £20k. per week…) We await a reply.
Frankly we are baffled how a repayment scheme can generate costs which escalate, especially as the rate of interest used to calculate the repayments was said to be 10%. It is hard not conclude that this is a money making scheme for the Fund, and that indeed if the contributions ceased after repayment of capital & interest there would be any loss of income to the Schemes.
If this is the case, then the Members that took the option, who tended not to have full pensions in the first place, are paying to help offset the deficiencies in the Funds. We will keep you informed of the Trustees reply.
7. Future Pension Increases at More Risk.
In earlier Newsbriefs we have been able to reassure pensioners that in the event of BA ceasing to underwrite the financing of the Scheme their pensions have first call on the assets of the Scheme. This remains the case, so pensions in payment remain secure. However as expected, the Government has introduced new Rules w.e.f. 10th. May 2004. These apply where a Fund is wound up with insufficient to pay everyone their benefit and the sponsoring employer is insolvent. Under these circumstances your pension would be frozen at the level being paid at the time the Scheme ceased. An insurance company would be paid to take over the payments of all the Members pensions. Your pension would then only increase in the future to the extent that increases could be purchased with any remaining monies.
The current shortfall in the funding of APS means only your annual increases would be at risk if BA were unable to pay further contributions. For completeness, we remind ABAP Members that the current funding shortfall in NAPS is such that the Scheme cannot afford the premium that an insurer would charge to take over the Benefits for all Scheme Members in full. So any NAPS pensioners would have their Pension frozen at current levels, and would forfeit all future increases. Those not yet on pension would face severe cut backs in the amount they could hope to receive.
Once the Pension Protection Fund is operational the situation will change again. It is proposed that where an employer becomes insolvent and there are insufficient monies in their scheme that the Trustee will pass over the whole scheme to the Pension Protection Board. This Board will then ensure that members who are, at that date over normal retirement age, receive the full amount of their pension currently in payment whilst those who are younger than this ( even if they are drawing their pension) would be sure of only 90% of their current pension and this may be subject to a ceiling of perhaps £25000 pa .
Increases will be granted only in respect of pension earned for employment post April 1997. Pensioners need to be more vigilant than ever before to ensure that the Pension Scheme Trustees negotiate adequate contribution levels from BA. In our opinion current contributions are too low.
8. The Treasurers Corner.
Many thanks to those who have already paid their 2004-2005 subscriptions. In order to prevent mild fog on our database will those Members who may have been away please respond to the Treasurer at 41 Linkway Crowthorne Berkshire RG45 6ES
The Committee of ABAP 15th September 2004.