3. Trustee Election.

4. Variable Pension.

5. Staff Travel Buddies.

6. The Unlucky 125000. Postcard to Gordon.

7. Individual Subs Reminder.

8. Stop Press !


1. AGM Report.

The 17^th AGM of the Association was held at the Concorde Centre Heston. Our thanks to the many of you who made the journey. The staff at the Centre said they were surprised to see so many turn up.

All the resolutions were carried including the reappointment of the auditors and to approve their remuneration. We had received 1299 proxy votes. The Chair made it clear that this was to be he last Annual Report as she will pass the baton on next summer.

The key points she raised were:

a) NAPS fund earned 6.85% on its assets to March 2007. APS earned just 3.69% on the same basis. Both schemes held shares in Northern Rock. APS held £3.4m & NAPS held £9.6m in March 2007. Both schemes sold the shares in July & August.

b) We have two schemes, each with its own Board of Trustees, but according to their Annual Report & Accounts they deem it right and proper to hold joint meetings & joint discussions at the Governance Committee, Investment Committee, & Operations Committee before a vote. ABAP had our Lawyers complain about this "cosiness", as it does not seem correct to us that any discussion on any subject will give the Trustees of the other Scheme an opportunity to put their views across even when the matter is of no concern to them, and indeed they will be excluded from the vote.

Surely this causes one Scheme’s point of view to influence the vote in the other Scheme.

The Scheme’s Trustees may well have voted differently had the discussion been held in private.

c) ABAP believes that governance would be improved if the Schemes had Independent

Professional Pensions experts as the Chair currently Roger Maynard of BA must have a conflict of interest. Independent & Professional Trustee appointments are on the rise according to a survey from the consultants Mercer Human Resources, which says that more than half of Schemes with assets of £1bn or more now employ an independent Trustee and in many cases this individual acts as Chair.

d) We need to be aware that Trustees will have crucial decisions to make if any bid is tabled to buy BA . Should BA be sold then the buyer would need to agree to take on the pension scheme debts. The pensions regulator expects the Trustees to ensure the buyer was financially strong enough to take on the debt and pay it off over time, or that BA place the proceeds of the sale into the Scheme. For Trustees caught up in a complex & fast moving transaction, the experts have several pieces of advice.

Plan Ahead ! Towers Perrin, principal Mark Duke, says "A Mobilisation Plan should be ready in the draw for when the phone rings."

Hewett Trustee & Scheme Actuary adviser Linda Whitney says "Trustees categorise buyer into Red, Amber, & Green as part of their advanced planning; with Green being a buyer such as a strong listed company that could improve scheme funding. At the other extreme Red meant a buyer who would hugely increase Scheme gearing."

Miss Whitney also warns about sorting out potential conflicts of interest before a bid develops.

"Employer Nominated Trustees may suddenly realise that they cannot sit on both sides, and it can be exactly the wrong time to lose someone with a lot of knowledge & experience." In some cases, an independent Trustee may be brought in or asked to become Chairman of the Trustees for the bid period. A special sub committee reporting back to the main trustee board may also be set up.

The crucial point for Trustees is to assess the extent to which a corporate restructuring would affect the employer covenant, or its ability and willingness to make pension contributions. They need to assess how safe is the promise to pay pensions. If a buyer is going to increase debt, their attitude should be to want more cash, but buyers may prefer to offer contingent sources of funding such as a charge over assets, letters of credit, escrow accounts, or a higher ranking as a creditor.

In normal funding talks, the guidance is that the employer should be able to "survive & thrive",

But Norman Russell Head of Pensions at Russell, Berwin, Layton, Paisner, says recent statements from the Pensions Regulator have told Trustee they may need to push for self sufficiency " If the Employer becomes highly leveraged, Trustees should sometimes look for a Buy-out Level of Funding."

e) In the 12 months to March 2007, NAPS members chose to take out of NAPS benefits worth £22.5m. Transfer values are set at a very low figure and are unlikely to be sufficient to match the benefits given up. The Law changes in April 2008 to give the Scheme Trustees the responsibility for setting the transfer amounts to be paid .

ABAP would like the Trustees to set a new, fairer basis but this would mean giving up the profit made when Members transfer out.

f) The Dept. for Work & Pensions decided to commission a report on areas under debate in the deregulatory review (including relaxing Section 67) and appointed Chris Lewin, former Head of Unilever UK Pensions and Ed Sweeney from Amicus Trade Union. This year we have been campaigning to prevent changes to pension legislation. So many thousands of you responded by posting the card we produced to the DWP that in the report Lewin & Sweeney published it says : "We also wish to thank the thousands of members of the British Airways Pensioner Scheme who wrote to us voicing concern that we might, among other things, recommend changes to accrued rights. They were not alone."

This shows that ABAP is very effective in speaking up for scheme members against the continued pressure from big employers. We note that this report recommends the Govt. not to make any changes to section 67, but we must not let our guard drop as the matter is still under consideration.

The Minister for Pensions Reform , Mike O’Brien welcomed the report. He said: " We want to lighten regulation, and when doing so will be mindful that it is important that we strike a balance protecting members benefits and encouraging employer provision of pensions. As the Reviewers acknowledge, it is not an easy balance to strike.

g) According to the latest report there some 1900 employees still paying into APS. They have been angered that BA, like other employers have decided that they can keep the cost of providing pensions down by restricting the growth of pay for pension purposes. Pensionable Pay will increase each year but only by the same amount as the RPI. This will mean that their pension will not be based on their Final Salary as they had been expecting..

ABAP has investigated the legal position and checked that the Scheme Rules have not been amended. However, the position is that BA can decide what pay counts for pension purposes as "Pay" means remuneration designated by an employer as pay for the purposes of these rules and does not include allowances, overtime bonuses, commission or any other payments unless specifically designated as pay.

The remaining APS employees have formed a new Action Group to use their Rights under the Rules to call a meeting to protest. We support them, and would like their leaders to join the ABAP Committee.

h) Our Mailbag has been full of letters from those of you suffering as a result of the Variable Pension. The APS Trustee has the unilateral power to change the rules and so we know they could solve the issue at any time they choose to do so……..

This summer the Trustees considered whether they should take any action to rectify the Variable Pension. The Trustees had a very full discussion on the matter. In summary the discussion was in two parts – firstly to look carefully at the serious allegations made by ABAP that the Trustees had failed in their Duty of Care to the Beneficiaries but the Trustees concluded there were no grounds to support those allegations. Secondly, they considered whether any changes be made to the Variable Pension for already participating in the arrangement.

I am sorry to report that despite the APS Pensioner Trustees voting in favour, the seven other Trustees voted that No Change should be made at this time.

These other Trustees include those who represent the current staff. It is appalling that they are too blinkered to want to help just because pensioners no longer work for the airline.

The issue here is that the then Scheme actuary made a guess about the average lifespan & about interest rates so the gamble was distorted.

We know that out of date mortality tables were used, but the Trustees today argue that this was acceptable as the table did correctly match the age of death at the time the scheme started.

Any reasonable person can see that:

1) The Life expectancy assumption that Members would on average live until 77 years of age has proved too pessimistic.

2) The rate of interest assumed at 9% cannot be obtained.

Our Actuary worked out an example using one of our members showing if interest at 5% were assumed and with average life expectancy of 86, the annual "payback" would be £900pa instead of the current £2300pa.

You are right to feel hard done by !

i) Some questions are about Staff Travel. I have to make it clear that this falls outside our scope and is rightly a concern for the Retired Staff Association.

Philip Howells has a list of ABAP members who are willing to help non computerised Pensioners sort out their Staff Travel. (see item 5 below)

j) The ABAP Accounts for the year to 30^th June 2007 show we were broadly able to match expenditure to our income and that our reserves are healthy. Members did express concern that the "Donation" income as shown was lower, but this is explained by the move to make subscriptions payable only by those with pensions over £4000 pa and there were fewer purely donation transactions in the year as separate from subscription payments.

k) The Association is large & successful, the administration tasks many and time consuming. All of the work for has been undertaken by volunteers who have taken nothing for time or petrol. You are all very interested in the long term security of your pension , but I have tell you that unless more of you take an active part in the day to day running of ABAP we cannot fully address all the issues, not least of which are the Government proposals for Pension reform when they are published , what ever they may be.

There is very little you can do on an individual basis if changes are enacted that threaten our income. Strength of protest is required in these situations, and remember we have the resources to seek expert opinion on any matter. This is some thing well beyond the financial reach of most of us individually.

ABAP works on behalf of all those whose pension is dependent on BA. We need some new Committee members to come forward , willing to take on the vital work we do and as explained last year it is accepted we must pay for some tasks to be done.

Please support ABAP with your time & hard cash.

2. AGM Talk by Dr Ros Altmann. Investment & Pensions Expert.

The talk took place on October 8^th at the Concorde Centre. The full text is attached to this Newsbrief entitled " How Safe is Your Pension ? "

3. BA Pensions Trustee Elections 2007.

The APS Pensioner Trustee Election Result

Total Eligible to vote 19187

Ballots accepted 10730

Captain Mike Post 9641 votes Re elected for 5 years.

Mr Graham Tomlin 6697 votes Elected for 5years

The NAPS Pensioner Trustee Election Result

Total Eligible to vote 3777

Ballots accepted 1094

Mr Ian Rycraft 904 votes Elected for 5years

Mr Howard 188 votes

ABAP congratulates the successful candidates and thanks Members for their enthusiasm.

Members are reminded that Scheme Rules currently prevent widows & widowers from voting in Trustee Elections.

4. Variable Pension Option.

Despite the disappointing result of ABAP efforts at the June Trustees Meeting we are continuing to professionally explore different approaches to this stubborn issue. (see AGM report above)

5. Staff Travel. "Computer Buddy" for those without Computers.

Those pensioners wishing to use BA Staff Travel who are denied access because they do not have a computer may like to write to

Philip Howells, ABAP, Unit 10, Solent Industrial Estate, Hedge End, Southampton,

SO30 2FX.

He will put you in contact with a computer buddy who will process your staff Travel with you to BA.Staff Travel via the internet.

6. Gordon Brown : Occupational Pensions Security.

Enclosed is a printed postcard to sign to send to The Prime Minister at No.10 Downing Street in support of those 125,000 pensioners who have been devastated by the failure of their Pension Schemes.

7. Individual Subscription Reminder.

Enclosed is an individually addressed reminder to those Members who may have only just returned from their holidays and who are showing on our database as having not yet got around to paying their subs for this year. If you do NOT receive an individual form then you have PAID.

Thank You.

8. Stop Press !

Since the formation of APS nearly 60 years ago, & the formation of NAPS in 1984, the Minutes of the Meetings of the Pension Scheme Trustees have been available on request to Members and Pensioners.

To keep this facility open, would ABAP members please now write to Roger Maynard Chairman of Trustees at: Whitelocke House, 2/4 Lampton Rd , Hounslow. Middx. TW3 1HU

The Committee of ABAP 15^th October 2007.