British Airways PLC will increase the retirement age of its pilots and other workers in a bid to tackle a 1 billion pound ($1.75 billion) deficit in its pension fund, the airline announced Thursday.
The current compulsory retirement age for pilots and cabin crew is 55, but BA plans to increase that to 60 for pilots and 65 for cabin crew. It said the move would cut the budget deficit by 450 million pounds ($785 million).
"This is a solution that will provide competitive, affordable pensions for the future," said Willie Walsh, BA's chief executive.
Walsh said the new arrangement "means working longer to get a similar annual pension but one that is more secure."
The Transport & General Workers Union, which represents 20,000 employees at the union, said it should have been given more information about the scheme.
"It was no secret that BA's pension funds were in deficit but we still don't really know if today's measures will be the right ones for our members and for the scheme," said national officer Brendan Gold.
Union leaders were told the airline will pay 500 million pounds ($874 million) into the fund once the planned changes were accepted.
Ed Blissett, of another BA union, GMB, said the union was seeking urgent meetings with the airline to discuss the plan.
"Once negotiations have concluded we will refer back to our members for their decision on whether they are acceptable," he said. "If GMB members feel it necessary to oppose changes, the union will support them."
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