NEWSBRIEF NO 78
CONTENTS 14th October 2009
1. AGM 2009 Report
2. The Reasons for an Independent Chairman of Trustees
3. Government New Pension Scheme. New proposals for a delay.
4. Subscription Reminder Form from Treasurer.
** Only for those who have yet to return a Form.**
5. Unidentified Bank ABAP subscription payments.
6. ABAP enclosed colour pamphlet.
7. Rumour Corner.
1. AGM
Chairmans Report. (Dayne Markham)
Welcome to the 2009 AGM ,whether you are old members, new members or just here for a “suck-it-and-see”. It is very heartening to see the number of you here today. We also have in proxy attendance today of just under 1000 Members. I will start by introducing the committee as present, to tie up with the published profiles in the AGM papers as distributed.
Taking the year in chronological order I will start with the ST09 Staff Travel Campaign that we supported. It has in fact already reported separately to members & non members; but although it did not succeed it was not for lack of merit or support. It was run in a time of financial gloom & Bad News sells papers. The Association gives a large vote of thanks to Philip Howells for his tireless efforts in carrying through the Staff Travel Campaign. ABAP and all pensioners continue to deplore the retrospective parts of ST09.
The removal of ST for pensioners widows/widowers started on March 31st.for no stated reason other than the blanket “fairness”. Yet we are recently reminded by BA Manager ST that partners can be changed every 6 months even with no connection whatever with BA. We will continue to research ways of making changes. Staff Travel Watch will come up under AOB.
Turning now to the VPO. The request to Chairman of BA Pensions Trustees that the long running VPO complaint be dealt with; and a result left In Being was turned down. ABAP then requested the VPO be dealt with by Arbitration, under Clause 13 of the Trust Deed. This has been denied by the Chairman again as the clause is not deemed appropriate, despite an exchange of legal opinions. Chairman had already placed a moratorium on VPO discussion at Trustees Board meetings until effectively 2013. This is clearly unacceptable to pensioners on the grounds of the age of affected VPO pensioners.
Therefore a ruling on arbitration of the dispute, and a complaint on the handling of the VPO, has been drawn up professionally for the Pensions Ombudsman following the collation of a mass of new evidence from members. Without the patience and support of Members there would be no progress.
Moving now to the Pension Schemes. At the time of the triennial valuation in March it was clear that in step with the national financial situation, they would probably be in deficit to a greater degree than expected. As a precautionary move, ABAP have examined the PPF relative to our schemes and have placed ABAP monitors on the PPF. They are Capt. Peter Duffey (Can) & Frank West (NZ), who report almost daily.
Capt. Mike Post gave an up-to-date report on the general situation on the schemes valuation which is proceeding with the future plans to restore both schemes to positive balances over the medium term; and to reassure members that the Scheme Bank Guarantee has not been called. BA has just used the fact that it has the facility to call on it if necessary in the future to raise more immediate funds now. So there is no use of “alternative security,” or detail of any proposed, as none has been designated - so hence cannot be valued. Capt. Post was warmly applauded.
The ABAP Website. This year ABAP now has a wholly ABAP owned website. The previous website has served ABAP well since 1999. It was voluntarily set up and run for ABAP by Member Mr Philip Howells with whom many of you are familiar. This worked well for some years, but finally eroded until features were appearing on the website under the ABAP heading without ABAP prior knowledge and that were not directly relevant. All this finally provoked a strong threat of legal action from BA, mistakenly directed at ABAP Chairman & Committee. This demeaned ABAP with BA, & hence the BA Pension Trustees & Chairman, blunting the effect of the pensioner Trustees supported by ABAP so that the member nominated trustees for those still employed were more likely to side with BA rather than the pensioners on any pensions point at issue at Trustees Board meetings.
Clearly the time had come for editorial control of the existing website or, failing that, purchase of the website. The owner having refused my spoken offer to meet him in Manchester; repeatedly refused both courses after this incident. ABAP cannot be exposed to the risk of public ridicule at the whim of the owner, let alone the legal costs of arising representation should any item be taken to law by an offended party. Therefore it was agreed we have no choice but to run our own website & take our own risks. I have received only one adverse comment but many positive. Our website is steadily improving under our secretary David Waddington, giving an accurate ABAP picture. Set up costs were minimal compared to the potential costs of remaining as we were.
Nevertheless ABAP does owe Philip Howells a debt of gratitude for voluntarily keeping the association in view in cyberspace since 1999 and we wish him a speedy recovery.
Speaking now with reference to our membership offer of free ABAP membership for the 2009/2010 ABAP year for new members, open until 31st Dec 2009. BA is running a VR (Voluntary Redundancy) programme following its large financial loss last financial year. It is likely that many close to retirement will be tempted to retire early. This will materially affect the ratio of active/retired members in both schemes earlier than would otherwise have happened. ABAP is alert to a consequent shift in the balance of member nominated trustees. It will bring into high relief yet again the requirement for more pensioner elected Trustees.
Finally, the questions sent in by our proxy members will be answered separately under AOB
2. ABAP Treasurers Report.( Jack Shill)
Jack Shill ABAP Hon Treasurer elaborated on the 2008/2009 accounts circulated. Additional funds had accrued from the winding up of the Staff Travel Fighting Fund which were not shown. The association was in good financial standing but had to be able in these times to stand up in legal action for BA pensioners should the circumstances arise. Would members paying their subscription via their Bank please ensure to add Name & Staff No. to the payment.
I can report that Membership numbers are naturally declining slightly - but new members are joining steadily.
3. The Election of the Committee for 2009/2010. ( Dayne Markham)
The membership was offered the choice of individual election or en bloc election. En bloc election was chosen and the present committee re elected for 2009/2010 without opposition. However ABAP is always interested in new committee members to allow others in turn to stand down.
4. The Subscription Levels for 2009/2010.( Chairman)
It had been written in by a member that “the top level of subscription should be increased.” There was no support for this and present subscription levels will be maintained for 2009/2010. Should ABAP be faced with a major campaign, the membership has always responded.
5. The Occupational Pensioners Alliance Report.( Ray Smith)
Ray Smith reviewed the activities of the OPA and his attendance at their AGM. The OPA reporting of pension matters in the financial press is of continuing valuable assistance to ABAP.
6. The Annual Subscription to the Occupational Pensioners Alliance.
This was approved unchanged for 2009/2010.
7. AOB
i) Staff Travel Watch.(Dayne Markham)
ABAP members Alan Murgatroyd (NZ) & Conor Walsh (Can) were elected to maintain the Staff Travel Watch for 2009/2010 reporting to the ABAP Committee. The Chairman requested Members with work experience of staff travel to come forward, and several contacts were made afterwards. The aim is to find a member to be co-opted to the committee solely for the staff travel watch & formulate action to improve ST09 for pensioners. Progress will be reported. It is starting; here is the latest ST helpline phone no. 0844 493 0764.
Any voluntary help should have email capability. Please contact the Secretary, David Waddington: david.waddington@zen.co.uk
ii) Membership & Publicity( John Bennington )
The ABAP continuous effort in publicity and membership was outlined. Regular visits by invitation are made to RSA meetings up & down the country. Currently as well as the “Free Offer” there is a new ABAP pamphlet with application form needing as wide a distribution as possible to serving staff & pensioners as an on going feature.
iii) Frequently Asked Questions as sent in by members on the Proxy forms:
1)The large bonus paid by BA pensions to Ms M. McGregor Smith ?
A. This was paid because of her exceptionally careful watch on fund equities and optimum moves, making & saving large sums for the schemes.
2)Will a partner’s BA pension be affected by the NAPS deficit ?
A. If the pension is in payment to the beneficiary it will continue to be paid even under Pension Protection Fund rules. If it is a pension in prospect there might be changes but there will be plenty of warning.
3)Why is there not sufficient female representation on the committee?
A. Sandra Sellers continues to serve. So far no more ladies have come forward yet.
4)Why are there no NAPS members on the Committee?
A. Gil Carswell is a NAPS member and has been on the committee for two years. Geoff Leboutellier the NAPS Pensioner Trustee attends ABAP committee meetings as an observer.
5)Will cost of living rises be paid on BA pensions in payment?
A. These are calculated on the RPI taken for the previous September. This year the RPI for September is -1.4% which means there will be no increase in pension paid next April (2010) as a cost of living increase, but neither will there be a reduction.
6)Should BA pay back the contribution holiday payments to the Scheme ?
A. These benefited the BA balance sheet by an estimated £1bn over the years. For BA to pay them back now would clearly be disastrous for BA, however the company is obliged to come up with a pension scheme deficit recovery plan as dictated by the current triennial valuation that will ensure the continuity of the schemes which is pensioners prime concern.
7)Will the VPO be solved before I die, I am aged 90 years?
A. BA pensions have a pretty good idea of our life expectancy nowadays. They also know how much has been paid back. They also know how much it will “cost” the scheme to end the VPO. ABAP has taken the VPO to an independent body, the Pensions Ombudsman, who will report as soon as they can depending on the complexities. We will not let it rest. With respect, ABAP thinks it’s a good bet you will make it.
2. Reasons for an Independent Chairman of Trustees. Extract from the FT 28th September (Sandra Sellers)
EMI, the music company, last month was reported to have ousted the chairman of its pension scheme board of Trustees after he had requested the company add £170m to the pension scheme. The move highlights a fundamental flaw in the governance of UK pension schemes. Either their independence is restricted by the constitution of the pension fund that allows the sponsoring company to dismiss trustees. Or trustee boards can be headed by trustees who are so weighed down with conflicts of interest they cannot possibly be judged to be independent.
Most Trustee boards are still headed by the finance director of the sponsoring company and other seats on the Trustee board may be held by the finance director’s colleagues. Now listed companies have a responsibility to appoint an independent chairman of Trustees or explain to the shareholders why they have not. ABAP comment: Over to You Mr Walsh. BA is still a listed company.
3. New Government Pension Account Scheme. ( Sandra Sellers)
In 2012 a new compulsory pension account is to be introduced for all employees. This will be like a personal pension that the employee & his employer must pay towards. However, at first the employee only has to pay 1% of earnings rising annually to 3%. The Govt. are hoping that employers who already offer better than this will not close their schemes & replace them with the new personal accounts. They have therefore said that if the employer was offering better than the personal account arrangement, then all new employees must be automatically enrolled into the employers better scheme. Now after protest, this is now being watered down, as a direct benefit scheme costs far more than even 3% of pay. It is now proposed that the new scheme will not be fully subscribed by workers until 2016. Ros Altmann, who spoke to ABAP members at the 2007 AGM, says the new scheme is a mess and should be redesigned. In Parliament the Conservatives having initially backed the plan in principle, upon examination of the latest timing proposals stretching to 2016, have withdrawn support as it is possible with this time scale for some Employees to be left poorly provided for at retirement.
4. Subscription Reminder Form(Jack Shill)
The enclosed form is only for those who have not yet returned the form to renew their membership for 2009/2010. Please help ABAP to keep up to date with your membership.
5. ABAP has received unidentifiable subs as below.
Please check if yours is there and let Jack Shill or Unit 10 know, then you will get your new membership card! Email sylviaandjack@tiscali.co.uk or telephone on 01344 774 170
Payment Date | Reference Details | Amount |
07-Jul | TFR20117470180769 | £25.00 |
| 04-Aug | Deposit at Barclays Ashford, Kent | £50.00 |
| 08-Jul | Deposit at Barclays Swanage | £22.00 |
| 09-Jul | Deposit at Barclays Bognor Regis | £4.00 |
| 09-Jul | Deposit at Barclays West Molesey | £33.00 |
| 10-Jul | Deposit at Barclays Brentford | £19.00 |
| 14-Jul | TFR. 08928602142526 | £50.00 |
| 17-Jul | Deposit at Barclays Wokingham | £9.00 |
| 03-Aug | TFR 08930008019035 | £30.00 |
6. ABAP Colour Pamphlet (Gil Carswell)
Please give the attractive enclosed pamphlet to any BA or ex BA staff you may know. If you need more of them, or have a distribution idea, please contact: David Waddington, david.waddington@zen.co.uk OR Dayne Markham on 01489 782 637 if you have no email capability.
7. Rumour Corner ( Commercial Radio 12/10/09)
On Monday News 0900hrs “BA was reported to be considering moving its operational base to Spain.” There is still no plan on the table for the BA pensions Trustees to consider in the case of a merger between BA & Iberia, but there are frequent references that the plan is ongoing. Should this suggested “operational move” come to pass, then someone will be on the Boat Back to Dublin.
The Committee of ABAP 14th October 2009
Turning now to the VPO.
A request to the Chairman of Trustees to process a VPO settlement with a result left In Being even if postponed
in implementation was turned down. ABAP then requested the VPO be dealt with by arbitration under Clause 13 of the Trust Deed . This has been held by Chairman of Trustees as it is held to be inappropriate- despite an exchange of legal views