British Airways (BA) has chosen the Bank of New York to administer the $600m (£318m) in annual payments that the airline makes to the members of its pension scheme each year.
The mandate involves the management of payments to more than 40,000 BA scheme members across 46 countries globally, and is designed to enable BA to standardise and control its payments more efficiently.
In January, BA’s pension deficit had reportedly grown to £1bn – doubling since its last valuation in March 2003. BA then proposed a rise in the retirement age for pilots and cabin crew in March in a bid to close the hole in its scheme.
John Birch, managing director of British Airways Pensions, said under the new deal the Bank of New York would offer an improved service to scheme members.
“We conducted a competitive tender process that sought to identify a partner who could work with us to significantly improve the processes and controls of our benefits payments service,” he said.