British Airways: Trustees Sign GBP1.3 Billion Pensioner Liability Deal
02 July 2010 - 3:07AM
Dow Jones News
British Airways PLC (BAY.LN), an airline company, announced
Thursday that the trustees of its Airways Pension Scheme or APS,
have entered into an insurance transaction with Rothesay Life,
covering 20% of pensioner liabilities worth GBP1.3 billion.
MAIN FACTS:
-The APS scheme has committed to pay Rothesay Life
pre-determined cashflows.
-In exchange, Rothesay Life will make payments to APS matching
20% of the actual pension payments as they arise.
-The insurance transaction provides protection for longevity
risk and provides a direct match for the pension cashflows in all
inflation and interest rate scenarios.
-The transaction does not change contributions from British
Airways and is consistent with the long-term aims of the scheme to
reduce the reliance on the employer over time.
-Shares closed Thursday at 186.50 pence.
-By Zechariah Hemans, Dow Jones Newswires; 44-20-7842-9411;
zechariah.hemans@dowjones.com