BA loses landmark legal case against pension trustees

BA lost a landmark legal challenge over a decision by its pension scheme trustees to make additional payments to thousands of retired airline workers. In a 164-page judgment published on Friday, the UK High Court dismissed a wide-ranging legal action initiated by BA in 2013, against the trustees of its Airways Pension Scheme, which has 26,000 members. BA challenged a move by the trustees in 2011 to change the retirement plan’s rules to given them power to make discretionary payments to pensioners, in addition to the standard annual inflation rises. It then objected to a later decision by the trustees to use that power to award a 0.2% discretionary payment in December 2013, amounting to GBP12m, branding the decision “perverse and irrational”. As the funder of the pension scheme, BA would be on the hook for any shortfall, which could be exacerbated by making extra payments to members. The airline had argued that the total cost could spiral to GBP384m if the discretionary payments were made over consecutive years. On Friday the court ruled that the trustees’ actions were valid. “We are naturally very pleased with the clarity brought by the High Court’s decision,” said the APS. “We welcome the confirmation from the Court that we and our professional advisers acted appropriately in relation to those decisions.”<br/>