BA/bmi merger (was Virgin & Balpa - bmi next ?)
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FANS
I'd agree to the second part of your statement 
Re the first, I think some more detail will be needed. Firstly, it has nothing to do with BA - it is IAG conducting the purchase. You might suggest the difference is academic, but I'd say not:
To those in BA, the parallels might be seen as worrying - could we see the BA Pension funds also "no longer underwritten" by IAG, whilst IAG also have the financial means to adjust accounting to make BA technically bankrupt (much as LH have been said to have done to bmi)?
I find it highly questionable that LH & BA can be involved in a transaction that ultimately results in a reduction to contractual pension commitments, and think this should be of concern to every (private sector) member of a DB scheme
Re the first, I think some more detail will be needed. Firstly, it has nothing to do with BA - it is IAG conducting the purchase. You might suggest the difference is academic, but I'd say not:
- BA is a UK based plc, albeit no longer listed
- IAG is a quoted company in Spain
- LH ditto in Germany
To those in BA, the parallels might be seen as worrying - could we see the BA Pension funds also "no longer underwritten" by IAG, whilst IAG also have the financial means to adjust accounting to make BA technically bankrupt (much as LH have been said to have done to bmi)?
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This in the future could well be a possibility as with any final salary pension scheme in deficit. But with BA's liabilities it would sink the PPF as the Government is not bound to underpin it with taxpayers money (unlike public sector workers!!)
It all just goes to show how companies can wriggle out if they are determined enough and the pension regulators powers are not as strong as we might have thought.
It all just goes to show how companies can wriggle out if they are determined enough and the pension regulators powers are not as strong as we might have thought.
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IAG explicitly DOES NOT support BA's pension schemes;
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From what I read between the lines, BA were not prepared to stump up any more cash to fund the bmi pension shortfall just as Iberia was not prepared to merge with BA unless the BA pension liabilities were capped.
Lufthansa only offered what they did because they were so desperate to offload bmi. I believe they needed to double the £84M offered to put the scheme on a stable footing
If the bmi pension deal had not gone through then IAG would probably have walked away from the merger.
The PPF has stepped in because the bmi fund is insolvent. In future years they,the PPF, will have to put their hands in their pockets, so to mitigate their loses the bmi guys have had to take a major hit, 20% plus I suggest. However there is one short term beneficary, its the government & the deficit.!! The £400/£500M?? of bmi pension assets will reduce the governments GDP debt this year just as the Post Office scheme did when it was taken into public control. George Osborne will be happy.
Lufthansa only offered what they did because they were so desperate to offload bmi. I believe they needed to double the £84M offered to put the scheme on a stable footing
If the bmi pension deal had not gone through then IAG would probably have walked away from the merger.
The PPF has stepped in because the bmi fund is insolvent. In future years they,the PPF, will have to put their hands in their pockets, so to mitigate their loses the bmi guys have had to take a major hit, 20% plus I suggest. However there is one short term beneficary, its the government & the deficit.!! The £400/£500M?? of bmi pension assets will reduce the governments GDP debt this year just as the Post Office scheme did when it was taken into public control. George Osborne will be happy.
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CF - you clearly have a better handle on this than many, particularly me. I have been trying to establish exactly "what" BA is, in employment and legal terms, for various reasons. I shall try to understnad that link at some point in time 
I do note the clause you mention, however, seems only valid for 5 years?
I do note the clause you mention, however, seems only valid for 5 years?
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The legal positions of breaking the veil of a limited company, DB pension schemes and jurisdiction are not questions for these forums, as no one here is privy to the transaction details.
All we know is that a transaction has occurred whereby (in substance) BMI staff will transfer to BA and as a result some will lose their previously agreed pension rights.
In the meantime, we have spent 500+ posts debating seniority lists etc., which are in relative terms a zero sum game/cost for management, whilst the airlines have potentially cost BMI staff £85m!
This situation is fundamentally different to redundancy etc., which can and does unfortunately happen and is in line with an employee’s T&Cs.
We now have a situation, however, whereby through the actions of LH/BA/IAG, employees have lost their previously contracted obligations, and this requires addressing ASAP for the interests of all UK private sector employees in a DB scheme.
All we know is that a transaction has occurred whereby (in substance) BMI staff will transfer to BA and as a result some will lose their previously agreed pension rights.
In the meantime, we have spent 500+ posts debating seniority lists etc., which are in relative terms a zero sum game/cost for management, whilst the airlines have potentially cost BMI staff £85m!
This situation is fundamentally different to redundancy etc., which can and does unfortunately happen and is in line with an employee’s T&Cs.
We now have a situation, however, whereby through the actions of LH/BA/IAG, employees have lost their previously contracted obligations, and this requires addressing ASAP for the interests of all UK private sector employees in a DB scheme.
Uncle Pete
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Off topic and Mods please forgive me:
Exactly one year ago today the Glendonbrook Centre for Enterprise Education was inaugurated at Loughborough University, located in the School of Business and Economics, and will provide fully funded PHDs.
This was funded with a donation of £1m by Baron Glendonbrook, who freely donates to a wide variety of good causes including the Royal Flying Doctor Service of Australia and Cancer Research.
Maybe MB saw the lack of business training within industry in general and has done something about it.
Exactly one year ago today the Glendonbrook Centre for Enterprise Education was inaugurated at Loughborough University, located in the School of Business and Economics, and will provide fully funded PHDs.
This was funded with a donation of £1m by Baron Glendonbrook, who freely donates to a wide variety of good causes including the Royal Flying Doctor Service of Australia and Cancer Research.
Maybe MB saw the lack of business training within industry in general and has done something about it.
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Hi Pete
Nice to hear from you again!
Whilst charitable donations to deserving institutions from LG (and anyone else) are good to see, it still sticks in the craw that he didn't see fit to 'donate' to, i.e. not rip the guts from the company, and, as we are seeing now, the retirement prospects of those that worked hard over the last 13 years; for I believe that is the point when he decided that the only person who deserved to benefit from the airline's existence was himself.
Nice to hear from you again!
Whilst charitable donations to deserving institutions from LG (and anyone else) are good to see, it still sticks in the craw that he didn't see fit to 'donate' to, i.e. not rip the guts from the company, and, as we are seeing now, the retirement prospects of those that worked hard over the last 13 years; for I believe that is the point when he decided that the only person who deserved to benefit from the airline's existence was himself.
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Sorry but what on earth has that got to do with the fact that bmi is now being dismantled and the thousands of staff who put years of their lives into it are being stuffed over by being both made redundant and having their pensions chopped down?
Mostly because Lord Glendonbrook ripped the heart out of the company to feather his own nest, most of which could easily be construed as a total disregard of his fiduciary duty toward bmi.
Mostly because Lord Glendonbrook ripped the heart out of the company to feather his own nest, most of which could easily be construed as a total disregard of his fiduciary duty toward bmi.
Uncle Pete
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I think MB's attitude to his pilot workforce is well known and I felt I was treated as a necessary evil, certainly I felt that in the 1970s until the mid 1980s. The words overpaid and premadonas spring to mind. Cabin crew could be recruited from the local Woolsworth counter store in Ashby.
Yes, I agree with totally and entirely with your last remark. Spot on!
I was trying to show the two sides of a person. A lot of people have been deeply affected by the way the airline has been run by a management model that appeared to have it's origins in Loughborough's town square market.
I strongly feel that MB should match the proposed LH "donation" of £84m. After all he helped make this mess and should pay part of the price. He has not been exactly coy about how much he carried off int the sunset. Was it about £250m? How much of that can you actually enjoy spending in your declining years, £8m a year?
Perhaps write it off against tax with a bit of creative accounting?
Yes, I agree with totally and entirely with your last remark. Spot on!
I was trying to show the two sides of a person. A lot of people have been deeply affected by the way the airline has been run by a management model that appeared to have it's origins in Loughborough's town square market.
I strongly feel that MB should match the proposed LH "donation" of £84m. After all he helped make this mess and should pay part of the price. He has not been exactly coy about how much he carried off int the sunset. Was it about £250m? How much of that can you actually enjoy spending in your declining years, £8m a year?
Perhaps write it off against tax with a bit of creative accounting?
Last edited by MaximumPete; 20th Apr 2012 at 13:48.
If balpa do nothing else in this, employing a lawyer or two and a forensic accountant actuary to trace back when/where the Scheme went all wrong and beyond rescue would be a good start.
May be it's not MB - maybe it was the Actuaries who advised the Trustees? Some very detailed legal and actuarial digging is required.
May be it's not MB - maybe it was the Actuaries who advised the Trustees? Some very detailed legal and actuarial digging is required.
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Ancient Observer
-Hear, hear! The coming months will be the last opportunity to do anything to change this disgraceful situation; to think that just a couple of years ago the company refused entry of the ex-FS pension scheme members onto the DC scheme at the same level as other employees, as we had 'benefitted'
from such a gold-plated scheme in the past................
-Hear, hear! The coming months will be the last opportunity to do anything to change this disgraceful situation; to think that just a couple of years ago the company refused entry of the ex-FS pension scheme members onto the DC scheme at the same level as other employees, as we had 'benefitted'
from such a gold-plated scheme in the past................
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City Flyer
You obviously have some inside information. The £84M put in by LH you imply was the least they thought they could get away with.?? They could have perhaps put in nothing under current law.??? So this sum was a PR exercise, so if the stink is great enough then more could follow.???
LH is a big rich company and no company wants bad PR. The implications for all future pension schemes under wind up legisislation are potentially grave.??
You obviously have some inside information. The £84M put in by LH you imply was the least they thought they could get away with.?? They could have perhaps put in nothing under current law.??? So this sum was a PR exercise, so if the stink is great enough then more could follow.???
LH is a big rich company and no company wants bad PR. The implications for all future pension schemes under wind up legisislation are potentially grave.??
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I'm no pensions expert, but something isn't right here.
Lufty owned the bmi group of companies and, even if there was any previous doubt, today's confirmed sale minus the pension scheme placed the ball very firmly in their court. I've tried to work out how Lufty aren't entirely responsible for supporting a normal continuation of the pension scheme and there have been some excellent posts on this thread, but I'm still unconvinced that recent decisions are correct.
I'm mainly posting to suggest that, although participating and viewing on PPRuNe helps to share knowledge, etc., it doesn't influence the key people making the pension scheme decisions. All involved employees must raise their doubts and questions with the Trustees.
Any BALPA memeber must ensure that the recent positive statements from head office aren't allowed to wither, as so many BALPA efforts all too frequently do.
Give the Trustees some stick and keep telling BALPA that you support their efforts.
As for the recent thread drift, may I suggest Jet Blast and a title 'How does one go about buying an honourary degree and a New Year's honour?'. Not that I'm implying anything regarding the poster or his subject, you understand. As if I would.
Lufty owned the bmi group of companies and, even if there was any previous doubt, today's confirmed sale minus the pension scheme placed the ball very firmly in their court. I've tried to work out how Lufty aren't entirely responsible for supporting a normal continuation of the pension scheme and there have been some excellent posts on this thread, but I'm still unconvinced that recent decisions are correct.
I'm mainly posting to suggest that, although participating and viewing on PPRuNe helps to share knowledge, etc., it doesn't influence the key people making the pension scheme decisions. All involved employees must raise their doubts and questions with the Trustees.
Any BALPA memeber must ensure that the recent positive statements from head office aren't allowed to wither, as so many BALPA efforts all too frequently do.
Give the Trustees some stick and keep telling BALPA that you support their efforts.
As for the recent thread drift, may I suggest Jet Blast and a title 'How does one go about buying an honourary degree and a New Year's honour?'. Not that I'm implying anything regarding the poster or his subject, you understand. As if I would.
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Its an appalling state of affairs when a person not only loses their job but a significant
amount of their accrued pension pots. Those just about to retire must be going up the wall with worry.
amount of their accrued pension pots. Those just about to retire must be going up the wall with worry.
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Yup! and it is becoming a habit with Lufthansa; Lufthansa is criticised by MP for benefit cuts
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There is no 'if'. As of 0001 hrs on 20 April, baby and regional were both taken over by IAG. As to the effect? It could be that of a fly hitting your car at 70mph i.e. not much. Or driving into a deer at the same speed... Nobody really knows.