Feb 22, 2021
British Airways to defer £450m of pension contributions
British Airways has agreed to defer £450m of pension deficit contributions and will pay no dividends to its parent International Airlines Group for the next three years, as it secured financing agreements that will increase its liquidity. The company will defer monthly contributions of £37.5m from October 2020 to September this year, as part of its agreement with the trustee of the New Airways Pension Scheme. BA will provide property assets as security, which will remain in place until the airline has repaid the deferred contributions. BA will be barred from paying dividends to IAG before the end of 2023, after it secured a government guarantee that is designed to help its recovery from the impact of coronavirus and Britain's exit from the EU. From 2024, any dividends paid will be matched by contributions to NAPS of 50 per cent of the value of dividends paid. In response to the pandemic, the pensions regulator in April eased its rules to give companies hit by Covid-19 disruption breathing space to defer their monthly deficit pension contributions for up to three months.
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