British Airways Announces Proposals to Close NAPS Pension

Closure would protect existing benefits, but unions express “dismay and bitter disappointment.”

In an effort to slow a “significant and growing funding deficit,” British Airways announced proposals to close its main pension, a defined benefit plan known as the New Airways Pension Scheme (NAPS).

While the benefits members had already earned would be protected, employees would no longer continue paying into the plan if the motion passes. The proposals were part of a consultation the airline expects to commence “in the coming weeks.”

According to the BBC, British Airways has put £3.5billion into NAPS since 2003, when it closed to new members, but as of March, the pension was facing a £3.7 billion deficit—the largest of all UK company pension deficits relative to a company’s overall financial value, according to the airline.

“In 2017 alone, the airline will pay £750m in pension contributions and has already committed to provide between £300m and £450m a year until 2027 to address the NAPS deficit,” the airline told the BBC. “If NAPS remained open to future accrual, the cost to the company of providing future benefits to NAPS members could rise to 45% of individuals’ pensionable pay in 2018—more than four times the typical employer contribution of UK airlines.”

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NAPS contains roughly 17,000 members. British Airlines’ defined-contribution pension plan, BARP, holds more than 20,000 members.

Unite and GMB issued a joint statement, expressing  “on behalf of our members and in the strongest possible terms, both our dismay and bitter disappointment at the news that British Airways has announced its intention to close its main pension scheme,” Unite and GMB said in a joint statement. “Thousands of loyal and long-serving staff, who have helped build British Airways into a world-class flag-carrier for this country and one of the most recognisable global brands, now face uncertainty in their retirement.”

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Norges Bank Real Estate Management Names New CIOs

Per Løken and Romain Veber to oversee the US and Europe, respectively.

Per Løken will oversee Norges Bank’s US Investments.

Norges Bank Real Estate Management has promoted Per Løken and Romain Veber as its CIOs. Løken will oversee the company’s US investments, while Veber will oversee its European investments.

The bank said the investments will be divided equally between Europe and the US, and that its investment strategy is simply to “invest at a steady pace.”

Løken joined Norges Bank Investment Management in 2011, primarily focusing on UK real estate investments. He was promoted to business manager in 2014, and most recently was the company’s interim CIO.

“I am excited and proud to get this opportunity to lead the US Investment team,” said Løken in a statement. “We have come a long way since I joined the fund in 2011, and since we made our first real estate investment in the US in 2013. I look forward to continuing building our portfolio with the team.”

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Løken has a Master of Science in Real Estate from the UK’s Cass Business School.

Veber also began working for Norges Bank Investment Management in 2011, starting out as a portfolio manager, leading the bank’s investment efforts in Paris focusing on French real estate investments. Prior to joining Norges Bank Investment Management, Veber worked with MGPA and Morgan Stanley. Veber has a Masters in Economy and Management from France’s ESSEC Business School.

“I have been working with the fund since 2011, and am confident that we have a solid foundation for continued success and growth,” said Veber.

The bank’s investments in unlisted real estate returned 1.7% in 2016, and had a market value of 191 billion kroner. The fund held 807 properties in its portfolio totaling 15.4 million square meters, and investments were spread across 13 countries and five currencies.

Romain Veber will oversee Norges Bank’s European investments.

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