Pension NewsBrief No.60
Contents: 27th July 2005.
1. Pension Protection Fund
2. ABAP Committee
3. Pensioners Yet to Come.
4. NAPS Funding.
5. Payment for Pensioner Trustees
6. AGM 2005.
7. Treasurers Corner
8. ABAP website
1. Pension Protection Fund.
The heat is on..
Whether you are enjoying warm weather or not, you will be glad to hear that the ABAP campaign to prevent any suggestion of your pension being reduced to pay the Pension Fund Levy has paid off.
The phones at BA Pensions rang red hot & you certainly made your feelings clear.
Though, sadly, BA still seem intent on insisting that the insurance levy must be paid out of existing scheme assets. We must strive to get the Trustee Boards to press for further contributions into the schemes to cover these increased costs that will only go up in the years ahead.
2. ABAP Committee.
By way of introduction...
Sandra Sellers, our new Chair, is a qualified pension professional of some 30 years experience.
She is both a Fellow of the Pensions Management Institute and a Fellow of the Chartered Insurance Institute, and is featured in the publication People in Pensions ( a pension Who's Who).
Sandra worked 8 years for BA Pensions in the 1980's. She has a deferred pension in APS. Her husband Ray worked in Cargo for 28 years and is a NAPS pensioner.
She is still working as a Pension Manager. This enables her keep up to date with the fast moving legislation that has become a feature of present times.
If you need to contact Sandra may we ask that in the first instance you write to Vice Chairman Roy Hutchings.
3. Pensioners Yet to Come.
Who do you know who has not yet retired ?
New Tax Rules are coming in to force from April 2006. Please note the tax changes are complex (no change there then) so you may well need to seek financial advice before April.
Here we highlight some major changes.
The new rules make paying extra AVC very attractive as it will once again be possible to take out the AVC fund as tax free cash on retirement.
BA pensions have confirmed to us that they have decided to continue the present policy of only allowing a current member to save in total 15% of taxable earnings.
However, after April 2006 anyone under 75 can pay into their own personal pension and can draw out 25% of the fund as cash, with the remainder buying an annuity.
This opens up a new financial option for both current scheme members and some current pensioners.
From April 2006 those retiring may commute 25% of the value of their Scheme entitlement up to a maximum of £300k tax free.
The earnings cap introduced in 1989 to limit the maximum pension payable is being replaced with a lifetime allowance of £1.5m.
Check if you maybe affected by multiplying your annual pension by 20.
It is alright for some .....
According to the BA Annual Report& Accounts Rod Eddington had a pension fund valued at £1.3m. This is the published transfer value he could have accepted at 31 March 2005.
The regulations pertaining to transfer values change in September 2005 if you are thinking of accepting a transfer take careful advice. If you are going to divorce please note that the value of your pension may well alter with these new rules.
4. NAPS Funding
Again, according to the BA Annual Report & Accounts the deficit in NAPS is £1.5BILLION.
We will watch to see whether the Trustees take up the challenge laid down by the new Pension Regulator to negotiate contributions on the same basis as a Bank Manager with an unsecured creditor.
In fact the Trustees new powers mean they can exercise a veto on expenditure by BA on dividends, new aircraft (& Waterside HQ rock gardens) until this pension deficit is squared off .
5. Payment for Pensioner Trustees.
In the light of the above, BA is still holding out against making any payment to Pensioner Trustees. Yet these same Trustees are now to take heavy financial decisions about BA and are to be trained by law to be competent in this field. Is it time the definition of "retired staff" was amended in the BA Pension Deed to cover this re employment fairly ?
6. AGM 2005.
You are reminded that this year the AGM will be at the Concorde Centre on:
Thursday 13th October at 2pm
We were glad to see so many of you last year and hope to see even more this time.
As an innovation on the same day at the Concorde Centre we are planning:
A Talk on the New Pension Legislation starting at 1130 a.m.
Please bring everyone you know who has a BA Pension.
7. Treasurer's Corner.
The Treasurer thanks all those who have already paid their 2005/2006 subscriptions.
Due to the increasing effect of a £5 Bank charge for processing Overseas Cheques he requests that for small subscriptions our overseas members help by sending a 2 year subscription amount (i.e. paid up until June 2007) or risk sending currency notes through the post to:
The Treasurer,
Forty One (41)
Linkway,
Crowthorne,
Berkshire RG45 6ES ENGLAND.
8. ABAP Website www.abap.org.uk
In response to suggestions from members the ABAP website is to be made more user friendly. Will members please comment in due course.
The Committee of ABAP 27th July 2005