Of course the BA pension scheme can't fail, it's too big.
Anyone see another General Motors in the making ?
Remember what happened with the United Airlines Pilots pensions ?
Unfortunately we are looking into a black hole of underfunding where retirements are concerned, not just for pilots. How does the government expect to meet it's committments let alone step in to make up the short fall for everyone else ?
Gordon Browns rape of private pensions a few years ago bought him some short term relief at great cost to those affected, but the cupboard is getting rather bare. Massive committments have been made far in excess of the ability to pay them and the chickens will come home to roost.
The present system is unsustainable. Prehaps individual pension pots for everyone is the answer. Singapores Central Provident Fund would be a good model to base things on
CPF Board - Members - Home - my CPF 2.
Employer and employee contribute a set amount to a persons account, a guaranteed interest rate is paid on money left in the account, or it can be used to purchase approved investments, even a house. If you want a bigger pension, you contribute more money. What you've got for retirement is what's in your account. There are no unfunded liabilities because no one is entitled to a final percentage of their salary index linked to inflation. There is no burden on future generations to fund other peoples retirements, just a very strong incentive to take care of your own.
The money accumulated in the fund is invested to pay the interest.
The only thing you can guarantee regarding pensions in Britain is that the politicians ones will be protected.
Whatever the rights and wrongs of all this may be, if pensions to existing retired civil servants were to be reduced, this would be seen as the Treasury defaulting on its obligations, with all that would imply for the ability of the Government to raise money through bond issues.
Easy way around this is to pay the pensions as promised, and then subject them to a special tax. A way was found to rob the private sector pension schemes, the public sector should bear their fair share of the pain.