British (Rentokil) Airways
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British (Rentokil) Airways
First Qu.How long do you reckon before the first airline appears to close the final salary scheme to existing staff? Remember BA doing that to Brymon in the early nineties, and BA again (Ayling) changing the system the last time around.
BACX and BA both have very significant deficits, who do you think will be first, I can't believe Willie will miss a tempting target like this?
Second Qu. If Rentokil have effectively frozne their scheme in place, does that mean that existing employees have their accrued benefits also frozen for good, or continuing to accrue as though they were deferred members - in fact, do they effectively BECOME deferred members? If they ARE deferred members, in the case of this type of scheme closure, do their benefits freeze in real monetary terms, or continue to be worth 50ths, 60ths, 80ths whatever of their actual final salary, which obviously will be bigger than their present one. I believe a proper deferred member's pension entitlement continues to rise by a proportion every year, but this sounds worse than that.
Final Qu. Does anyone think BA will threaten action to support BACX, or BACX to support BA - we're all in this together now! 
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Not sure if these are the answers you are looking for but here goes.
It's pretty certain that BA's final salary scheme (NAPS) will close next year.
Any benefits accrued by the members of that scheme are protected and cannot be taken away or changed. Any new scheme agreed will take effect when the old one is closed and then be ongoing.
I'm pretty sure that this will be the case with Rentokill but I'm not sure of their situation.
At the end of the day it's sad to see these schemes go, but would you rather see the scheme go...or the company?
So.... go buy yourself a second property and stick it into the new SIPS scheme next year.
Hope this helps.
It's pretty certain that BA's final salary scheme (NAPS) will close next year.
Any benefits accrued by the members of that scheme are protected and cannot be taken away or changed. Any new scheme agreed will take effect when the old one is closed and then be ongoing.
I'm pretty sure that this will be the case with Rentokill but I'm not sure of their situation.
At the end of the day it's sad to see these schemes go, but would you rather see the scheme go...or the company?
So.... go buy yourself a second property and stick it into the new SIPS scheme next year.
Hope this helps.
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Ouch!
Thanks for that. The burning question though is that if, for example, one has, say ten years accrued, does that ten years preserve at ten years worth of 48ths of present salary, then uplifted in line with inflation or X% every year? This would be bad in terms of not having a DB scheme any more, (better than having no Company of course) but at least a return on contributions as promised is there. The nightmare would be if the Company said - deficit is XXXXX% and therefore, (for example), all your contributions are now worth 30% of what you thought, and this number is frozen in space and time till you retire. Given inflation, this would be a huge hit below the belt - I don't think the capital is available to purchase a third house anyway!!!!!!
Surely BALPA would not surrender the scheme just like that???
Surely BALPA would not surrender the scheme just like that???
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Residential property into SIPPS? Not any more!
See: Door Closed on Property Pensions
The yields on Buy to Let property make it a very poor investment now anyway.
Worse, you may be buying a depreciating asset.
See: House Prices Drop
See: Door Closed on Property Pensions
The yields on Buy to Let property make it a very poor investment now anyway.
Worse, you may be buying a depreciating asset.
See: House Prices Drop
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The SIPS scheme is not going to happen. Sorry.
Still a good idea to buy another property though. Don't forget to live for today and don't just think about the future all the time. Today is the future.
Happy Christmas!
Still a good idea to buy another property though. Don't forget to live for today and don't just think about the future all the time. Today is the future.
Happy Christmas!
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It's pretty certain that BA's final salary scheme (NAPS) will close next year.
BA can't afford to close the scheme because they'd have to pay off the £1.2BN deficit immediately, which management say is impossible. That is the crux of their current company wide propaganda campaign. If they suddenly decide they can actually afford to pay it off and close the scheme they'll see the biggest strike in BAs history across every staff group. There are a lot of groups, especially the pilots, who'd rather see BA go under than let WW get away with raiding our pensions to fund his bonus.
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Donnell added, however, that he believed the housing market had "finally bottomed" and predicted that prices would rise by an average of 1 per cent next year.
The Royal Institution of Chartered Surveyors also said it believed the housing market would recover next year, reflecting the impact of the interest rate cut in August and a likely further quarter-point cut in the first half of next year. It reckons UK house prices will rise by an average of 4 per cent next year and in 2007.
The Royal Institution of Chartered Surveyors also said it believed the housing market would recover next year, reflecting the impact of the interest rate cut in August and a likely further quarter-point cut in the first half of next year. It reckons UK house prices will rise by an average of 4 per cent next year and in 2007.
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It's pretty certain that BA's final salary scheme (NAPS) will close next year.
BA Can Afford To Pay
Not over by a mile.
They will have trouble flying their planes with no pilots.
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I heard on the radio yesterday that house prices were rising and that a housing slump had been avoided due to favourable interest rates etc.
It just depends which survey you read I suppose.
Go figure
It just depends which survey you read I suppose.
Go figure
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NAPS HAS closed. Its whether it is closed to existing members or not that is the question here. NAPS is not taking any new joiners.
Its not at all decided whether this will happen or not, there is a fair way to go yet and (I reckon) plenty of unrest to come.
Its not at all decided whether this will happen or not, there is a fair way to go yet and (I reckon) plenty of unrest to come.
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We have a pensions crisis in this country and many have jumped on the property bandwagon. If you bought five years ago it has been a great investment. But, if you buy at todays inflated prices it is a very bad one.
Property into SIPPs was seen as the saviour of the market by many. It is now not happening. Therefore, rather predictably, the vested interests in the property market are waging a publicity campaign to convince us all that prices are set to rise next year. Therefore, we should not fear investing in an already over priced asset. The property market relies on confidence.
It all sounds rather similar to 1989 when, in fact, prices didn't start to recover until 1995/6 (see below).
I believe in affordable housing giving individuals more disposable income to spend on consumer goods and services eg. Airline tickets, which in turn keeps me in a job.
The Sunday Times
SUN 05 NOV 1989
House prices may rise next spring
BRITAIN'S depressed housing market could pick up much sooner than expected, according to a forecast to be published this week. The Morgan Grenfell bank believes the housing market has reached a point where recovery is in sight. It says rising income...
The Times
THU 09 NOV 1989
House prices 'to rise'
Property prices in London, the south-east and East Anglia will recover next year and begin to increase by about 10 per cent a year, according to Morgan Grenfell, the merchant bankers, in a report on the housing market published yesterday. The recover...
The Times
FRI 17 NOV 1989
House prices to recover next year
House prices are expected to reach a turning point in the third quarter of next year after a two-year decline, Charterhouse the merchant and investment banking group said yesterday in its annual study of the housing market. A week ago another firm of...
Property into SIPPs was seen as the saviour of the market by many. It is now not happening. Therefore, rather predictably, the vested interests in the property market are waging a publicity campaign to convince us all that prices are set to rise next year. Therefore, we should not fear investing in an already over priced asset. The property market relies on confidence.
It all sounds rather similar to 1989 when, in fact, prices didn't start to recover until 1995/6 (see below).
I believe in affordable housing giving individuals more disposable income to spend on consumer goods and services eg. Airline tickets, which in turn keeps me in a job.
The Sunday Times
SUN 05 NOV 1989
House prices may rise next spring
BRITAIN'S depressed housing market could pick up much sooner than expected, according to a forecast to be published this week. The Morgan Grenfell bank believes the housing market has reached a point where recovery is in sight. It says rising income...
The Times
THU 09 NOV 1989
House prices 'to rise'
Property prices in London, the south-east and East Anglia will recover next year and begin to increase by about 10 per cent a year, according to Morgan Grenfell, the merchant bankers, in a report on the housing market published yesterday. The recover...
The Times
FRI 17 NOV 1989
House prices to recover next year
House prices are expected to reach a turning point in the third quarter of next year after a two-year decline, Charterhouse the merchant and investment banking group said yesterday in its annual study of the housing market. A week ago another firm of...
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"They will have trouble flying their planes with no pilots."
And the pilots will have a very poor pension without a company!
Very sadly for you (and me!) nigel, we all have to be realistic!!!
A DC pension will always be better than no pension at all, and (funny old thing) apparently we voted for a DC pension for new joiners anyway! (So I guess it must be pretty good, eh?)
We will reap what we have sown! How did you vote??
And the pilots will have a very poor pension without a company!
Very sadly for you (and me!) nigel, we all have to be realistic!!!
A DC pension will always be better than no pension at all, and (funny old thing) apparently we voted for a DC pension for new joiners anyway! (So I guess it must be pretty good, eh?)
We will reap what we have sown! How did you vote??
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As a newbie at BA on the Direct Contribution pension I have to just point out that if NAPs was so great then why did the pilot workforce vote to close it to new joiners?? I for one have no interest in industrial action to save NAPs, if the DC is good enough for all of the new guys then surely it is good enough for everyone!!
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AH - think ahead 10 years when none of you new joiners on DC pensions will vote for strike action to prevent NAPS closing.
All management have to do is wait. The inevitable will come.
Classic divide & conquer.
Perhaps new joiners by then will not even get a contribution into their DC pension and you'll find your contributions being lowered to their level? You reap what you sow!
All management have to do is wait. The inevitable will come.
Classic divide & conquer.
Perhaps new joiners by then will not even get a contribution into their DC pension and you'll find your contributions being lowered to their level? You reap what you sow!
Oh Shazbat!
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Great question Artificial Horizon, and one that could cause a few red faces to have answered. If I were sat on a final salary pension now, and could protect it by barring new entrants it wouldn't be a tough choice.
This pension crisis came on the radar about 15 years ago, and a large number of small companies realised that they would get badly caught out by final salary pensions - certainly my own company moved us over to Money Purchase schemes at the time and gave us our existing pension rights to put into the mp scheme.
The larger companies appear to have deluded themselves at the time. They believed the stock market would recover back to the old days of 9%+ growth (they used to put predicted values at 6%,9%, and 12% growth rates). It was either that or simply being too afraid to go to the Stock Exchange and explain a multi-million (or billion) defecit in the pension fund that needed plugging knowing that it would wipe out the share prices and the institutions would get on their backs. Look at the pension fund beginning with "E" - they set up legal action to recover £3bn+ (?) from the former directors - madness!
Now the time has come when they have to bite the bullet, and it will take a few years to do. I followed the link to BA Can Pay, but I suspect the stock market won't let it, or all the others. This is going to be gradual, and for everyone, but I storngly suggest it is inevitable - they simply cannot afford to pay for how it was, and we need to save more (gulp!)
As for the property issue - well it's the same with investment trusts - the current government is taking away some of their tax advanatges so we have to save even more.
So for those who are coming up to retirement now on a final salary scheme - you are so lucky and I wish you all a long and happy retirement. Please think about the rest of us having to ponder an uncertain future :-)
This pension crisis came on the radar about 15 years ago, and a large number of small companies realised that they would get badly caught out by final salary pensions - certainly my own company moved us over to Money Purchase schemes at the time and gave us our existing pension rights to put into the mp scheme.
The larger companies appear to have deluded themselves at the time. They believed the stock market would recover back to the old days of 9%+ growth (they used to put predicted values at 6%,9%, and 12% growth rates). It was either that or simply being too afraid to go to the Stock Exchange and explain a multi-million (or billion) defecit in the pension fund that needed plugging knowing that it would wipe out the share prices and the institutions would get on their backs. Look at the pension fund beginning with "E" - they set up legal action to recover £3bn+ (?) from the former directors - madness!
Now the time has come when they have to bite the bullet, and it will take a few years to do. I followed the link to BA Can Pay, but I suspect the stock market won't let it, or all the others. This is going to be gradual, and for everyone, but I storngly suggest it is inevitable - they simply cannot afford to pay for how it was, and we need to save more (gulp!)
As for the property issue - well it's the same with investment trusts - the current government is taking away some of their tax advanatges so we have to save even more.
So for those who are coming up to retirement now on a final salary scheme - you are so lucky and I wish you all a long and happy retirement. Please think about the rest of us having to ponder an uncertain future :-)
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Don't get me wrong guys/girls, I don't agree with BA trying to backstep now on a promise that was made to you when you joined. I think it is wrong and if I were in your position I would fight tooth and nail to keep the best part of my remuneration package. What I am getting fed up with is the fact that it is just expected that I should support a call for industrial action to support something that doesn't affect me. I have heard the argument that it does affect me as a raise in company contributions towards my pension is also a demand being made from BALPA. Now you can call me a pessamist but when the offer is put on the table to keep NAPs in return for an increased contribution from the members but with no gain for the new pension then I am not confident that all of the pilots who expect me to strike will say "NO, not until you address the new pension"!! I am not complaining about my pension, I knew full and well when I joined the details of it. I have just accepted that in this day and age I will be lucky to retire with any private pension that is truely worthwhile. Current projections show that my pension if retiring at 60 will be worth 12-14k per year, for every extra 5k per annum that I would like I have to save an extra 100k in the pot!! What all this stacks up to is the fact that I have to seek alternative means for my retirement, an extra couple of percent from the company will not, for me, make a difference to my need to look elsewhere. Additionally, it would not suprise me if in 15 years time the company contributions into my pension dissappear all together. So good luck guys, I hope that you succeed, and hey if it comes down to a stike then I will have no captains to fly with anyway
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I didn't vote to strike for new entrants to stay on NAPS because I don't believe in fighting for unwinnable causes. We would have been the only group in BA on strike, striking for a group of people who hadn't even joined the company and had the choice not to join if they didn't like the deal on offer.
Striking to preserve NAPS is an entirely different prospect, with a good chance of widespread company support. Occasionally a small number of new entrants complain about being sold down the river by their new colleagues in pension terms. I've yet to hear one of them complain about the vastly improved salary they currently receive due to us securing better pay scales for them at the last pay restructuring. We could have screwed everybody on PP1 to 4 because there was nobody in the company on those pay points due to the hiring freeze after 2001. Instead we fought a winnable battle and ensured that everyone who joined did it on the best terms we could realistically attain.
Striking to preserve NAPS is an entirely different prospect, with a good chance of widespread company support. Occasionally a small number of new entrants complain about being sold down the river by their new colleagues in pension terms. I've yet to hear one of them complain about the vastly improved salary they currently receive due to us securing better pay scales for them at the last pay restructuring. We could have screwed everybody on PP1 to 4 because there was nobody in the company on those pay points due to the hiring freeze after 2001. Instead we fought a winnable battle and ensured that everyone who joined did it on the best terms we could realistically attain.
Artificial Horizon
To be very precise there wasn't a "vote" as such. BA set out their terms and conditions for new joiners that included the infamous DC scheme. This they were able to do as they had already closed NAPS to new joiners (company-wide, not just pilots).
BALPA put out a consultative document with four questions which was so badly worded (delibrately say some) that no clear consensus for action was possible. The figures suggested that only 17% approx would support action on behalf of you and the others yet to join so BALPA shied away from attacking BA.
(As an aside - far more than 17% have declared "I voted to strike" on the BA BALPA site)
Predictably we now have "A Scale" and "B Scale" pilots based on future pension benefits and it will not take long for the "B" army to grow in size...................
why did the pilot workforce vote to close it to new joiners??
BALPA put out a consultative document with four questions which was so badly worded (delibrately say some) that no clear consensus for action was possible. The figures suggested that only 17% approx would support action on behalf of you and the others yet to join so BALPA shied away from attacking BA.
(As an aside - far more than 17% have declared "I voted to strike" on the BA BALPA site)
Predictably we now have "A Scale" and "B Scale" pilots based on future pension benefits and it will not take long for the "B" army to grow in size...................
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I believe that Scottie hit the nail on the head:
BA has pitted Artificial Horizon against Carnage Matey!
AH:
CM:
So neither cares about the other or, it seems, considers the effect that the other has on them. Case of "I'm alright, Jack" without realising that if they supported Jack, Jack would support them.
Good advice though, to sort out one's own pension. Very sound indeed....
LP
Classic divide & conquer.
AH:
I for one have no interest in industrial action to save NAPs, if the DC is good enough for all of the new guys then surely it is good enough for everyone!!
I didn't vote to strike for new entrants to stay on NAPS because I don't believe in fighting for unwinnable causes. We would have been the only group in BA on strike, striking for a group of people who hadn't even joined the company and had the choice not to join if they didn't like the deal on offer.
Good advice though, to sort out one's own pension. Very sound indeed....
LP
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Actually I voted for the BALPA proposal for a 'market leading' DC scheme. Currently BARPS is nowhere near market leading, its a bag of s**** and I would expect major improvements to BARPS as part of any negotiated NAPS deal. Notwithstanding that, there has to be an element of realism in peoples aspirations. I could ask for the moon on a stick and blame BALPA when I don't get it and somebody coming into the industry could wish for final salary scheme but nobody provides one.
BA are coming very close to a divide and conquer strategy but it's not helped by a minority of new entrants going off half-cocked about the injustices served upon them whilst ignoring the very real benefits the BA community at large has got for them. Much better pay for a start, along with serious negotiations to introduce seeded blind lines to the 777 and resolve the work coverage problems which see the junior guys working every single weekend and drafted when they're not. Of course we could just say 'screw them' but we don't because it's not fair. Perhaps after a few years in the company when they've seen their lot improve they'll appreciate why their comments are unhelpful.
BA are coming very close to a divide and conquer strategy but it's not helped by a minority of new entrants going off half-cocked about the injustices served upon them whilst ignoring the very real benefits the BA community at large has got for them. Much better pay for a start, along with serious negotiations to introduce seeded blind lines to the 777 and resolve the work coverage problems which see the junior guys working every single weekend and drafted when they're not. Of course we could just say 'screw them' but we don't because it's not fair. Perhaps after a few years in the company when they've seen their lot improve they'll appreciate why their comments are unhelpful.