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Comparison of the British Airways and IBM Pension PlansBA has two plans, the older one is a defined benefit plan called Airways Pension Scheme (APS), now closed to newcomers and a newer plan called New APS (NAPS). IBM has two plans, the older one is a defined benefit plan called the C Plan which includes the A, N, V, T and E Plans and a newer defined contribution plan called the M Plan. General
Members
Trustees
BA Fund History (the Airways Pension Scheme)APS was set up during government ownership for the three airways BOAC, BEA and British South American Airways, which now are embodied in BA. When BA was formed a new pension scheme called NAPS was set up to replace APS and BA employees were offered incentives to transfer. Most employees wisely chose to stay with APS so a second attempt was made in 1999 to merge the two schemes. The merger was endorsed by the Actuary and approved by the trustees, who are the same for both APS and NAPS. Fortunately for the APS members and pensioners Captain Mike Post studied the proposal very carefully, took independent actuary advice and led opposition to the merger. The members held meetings and a huge majority voted against the merger and they carried a vote of no confidence in the trustees. The trustees declined to resign. The matter came to the High Court on 31 March 2000 for a preliminary hearing and a full High Court hearing was set for January 2001. Meanwhile a new election was held for trustees at which Mike Post and others were elected and in October 2000 the Trustee Board reversed the decision to merge and abandoned the merger of APS and NAPS. The High Court hearing in January 2001 was held but the object was now to obtain a judgement on the rules for managing the surplus of the APS Fund. Comment: A notable victory for Mike Post and for the members and pensioners who provided instant support.
Similarities and Differences
Similarity:
Difference: The trustees for APS and NAPS are evenly balanced between BA appointees and member elected. The APS trustees can also communicate with their members, whereas in IBM the elected trustees are a minority (4 out of 12) and are forbidden to communicate on trust matters with the members who elected them.
Similarity: APS and C Plan Trust Deeds both forbid payments from the fund to the employer. In both cases the fund assets belong to the members so that if the fund is wound up the assets go to the members, not to the employer.
Difference:
Similarity:
CommentsThere are obvious similarities between the BA and IBM cases, the BA members were fortunate in having a vigilant member in Mike Post and also gave him tremendous support. Also the BA trustee board has equal representation for employer and members and open communication between the trustees and members. Note that BA held secret meetings to try to force the merger and succeeded in persuading the trustees to vote for it but were defeated by the members and the next election of trustees. In the IBM case again secret meetings were held and our newly-elected member trustees were presented with an apparent fait accompli and a unanimous management majority. A very difficult position for the member trustees. The real intent of the merger, ie to drain away the C Plan surplus to the M Plan, only became apparent over time with a small payment being disclosed in May 1998 (1997 Report) and larger ones at yearly intervals. IBM clearly believes that the merger has succeeded. We believe the merger, which IBM argues is currently lawful, is immoral, unethical and falls well below what we were led to expect from IBM. The merger should therefore be overturned. For details of the BA case, please consult the judgement by Mr Justice Lloyd. Case No HC0000209 dated 16 February 2001. This can be obtained from http://wood.ccta.gov.uk/courtser/judgements You may also want to visit the Association of BA Pensioners website
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