British Airways discharges £4.4bn in pension liabilities
- Legal & General takes over responsibilities for 22,000 pensioners as airline tries to protect itself from higher costs in future
British Airways has offloaded £4.4bn in pension liabilities to an insurance company in a bid to cap its pension responsibilities.
Legal & General will effectively take over the liabilities for 22,000 British Airways pensioners in the largest deal of its kind in the UK.
The aim of the “bulk annuity” deal is to protect British Airways from higher pension costs in future, which could happen because of poor investment returns or unexpected increases in life expectancy.
For years, British Airways has struggled to shed its reputation as a company with a huge and costly pension scheme with an airline attached. Shares in its parent company, IAG, were up nearly 0.5% on Thursday morning, its first rise since a calamitous data breach sent shares diving last week.
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