Blueprint
Having posted some ideas on this problem many pages ago (last yr), it is clear it is now coming to a head. It needs to as the NAPS debt has now increased by circa 130% since the last valuation and is probably already several £100M higher than the March 31st 2006 number.
I do not have the exact fund value to hand but suspect the current deficit number is close to 50% of what is needed to make NAPS viable.
Like any debt once you get behind the drag curve in a big way you just never catch up, unless you inject a huge capital sum. The current BA capital offer is clearly now only going to scratch the surface, so any future valuation is still going to be bad and unbalanced.
So what to do?
For the company I believe it has to give notice and close the scheme, (make it paid up). It can do this with 6 months notice. This will give them a huge liability but at least its crystallized their debt. They then negotiate with the trustees, a payment schedule, say £250Mpa over 10yrs. They can afford this as has been seen by their recent payments to reduce their capital debt.
They enrol the NAPS staff into the new money purchase scheme.
For the staff (NAPS people) I believe this is the fairest way as any benefits already earned are fully protected. As it stands the hybrid scheme being currently discussed is going to lead to "death by a thousand cuts of what has already been earned"
Why?
Because
1/ Staff will have to work longer to get their pension
2/ The benefits will be reduced by the lower accrual rates and inflation proposals
3/ If the scheme is still not in balance then BA will come back for more concessions
4/ The two current schemes within the BA workforce will lead to greater industrial disharmony as more and more new entrants join the current money purchase scheme.
I know its tough but at least it gives some future to BA and its workforce.