A pressure group has called on British Airways (BA) to appoint an independent chairman to its board of trustees.
The Occupational Pensioners’ Alliance (OPA), which represents members of pension schemes, has raised concerns about the independence of Roger Maynard, the chairman of trustees at the BA pension fund and the airline’s director of investments and alliances, the Times reports.
The trustees will begin talks with BA soon on closing the funding shortfall.
The airline’s pension fund deficit is one of the highest in the UK, and the trustees have commissioned an actuarial assessment of the scheme. This is expected to show that the deficit has soared in three years from £1.8bn to about £3bn. It has become so large that it could scupper BA’s proposed merger with Spanish flag carrier Iberia, the paper reports.
BA has said that it will not contribute more cash to the fund, which may have to accept assets or other guarantees instead. This year, the pension fund waived £330m in guarantees to help BA improve its financial position.
This has led to concerns over whether the board of trustees is sufficiently independent to protect the 100,000 members adequately. There are 12 trustees, half appointed by the company and half by the members.
The OPA represents two million pension fund members and is lobbying for a change to pensions legislation to increase the number of independent trustees appointed by schemes.
Roger Turner, executive director of the OPA, said: “Mr Maynard is a company director who has been closely concerned with the tie-up with Iberia and cannot, therefore, be seen as someone who can at the same time represent the interests of all the scheme’s members and also those of the company. It is totally unreasonable to believe otherwise.”
A BA spokesman said: “On the basis of legal advice and the fact that Roger Maynard played no part in the pension provisions outlined in the memorandum of understanding signed with Iberia, we are confident that there has been no conflicts of interest.”