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I want to leave my BA pension Scheme

You can choose to leave your BA pension Scheme (known as opting out) at any time before you leave employment with British Airways.

You should give this option careful consideration as opting out means you will be giving up valuable pension scheme benefits. There is no provision under the Scheme rules to cancel your opt out instruction once it has been made. We recommend you seek independent financial advice before proceeding as, once you have opted out, you cannot rejoin APS. You should also seek guidance from the Pensions Advisory Service. At the very least, you should provide your adviser with the APS Handbook, your latest pension benefit statement, and details of your circumstances.

Future pension scheme membership

If you decide to opt out of APS, while you remain a BA employee you cannot rejoin APS at any time. However, you can continue to save for your retirement and qualify for certain death-in-service benefits by applying to join the British Airways Pension Plan (BAPP) for future service. Visit the 'Reward@BA' section of the BA intranet for full details of BAPP and how to apply for membership.

Important note about auto-enrolment

If you opt out of APS (or if you have crystallised your APS pension) and do not choose to join BAPP, BA may automatically enrol you into BAPP as part of a rolling three-year cycle to comply with legal requirements. British Airways' auto-enrolment date occurs every three years starting 1 January 2013. You may be automatically enrolled in BAPP if you have been opted out of APS for more than 12 months on that date. If you do not wish to remain in BAPP once you have been automatically enrolled (for example you have Fixed Protection and do not wish to invalidate it by building up further benefits), you should complete the BAPP opt-out notice on the BAPP website. You can access this via the BA intranet using your BSAFE password, usually within one month of being notified that you have been automatically enrolled. You cannot provide advanced notice of your wish to opt out of BAPP. Please do not contact BA pensions about BAPP as the Plan is administered by a separate company, Aviva Life & Pensions.

Avoiding pension scams

The Pensions Regulator (TPR) has run a ‘pensions predators’ awareness campaign to warn individuals against transferring pension benefits to arrangements that promise to ‘liberate’ your pension benefits. Visit www.thepensionsregulator.gov.uk/individuals/dangers-of-pension-scams.aspx.

The Financial Conduct Authority also provides useful information on its website about pension scams, what to look out for and how to avoid them.

As mentioned above, you can also seek guidance from the Pensions Advisory Service.

Key facts about opting out

If you opt out:

  • You will no longer be able to make pension contributions to APS.
  • BA no longer make contributions to APS for you.
  • You will no longer be covered for death in service benefits within APS.
  • You will no longer be covered for APS ill health benefits.
  • You will not be able to continue saving AVCs in APS.
  • You will not be able to draw your pension earlier than age 55 while you remain in employment with BA.
  • You will not be able to draw part of your APS pension while continuing to build up future benefits under the Flexible Retirement option.
  • You will not be permitted to rejoin APS. You will be able to join the British Airways Pension Plan (BAPP) from the 1st of any future month. There are some important death benefit considerations about joining BAPP if you do not apply to join immediately on opting out of APS – see the BA Intranet for full details about BAPP.
  • If having opted out, you choose not to join BAPP, British Airways is required to enrol you into BAPP every three years automatically.
Opting out to avoid the Annual Allowance (AA) charge

If you are considering opting out of APS because you are expecting to exceed HM Revenue and Customs' (HMRC's) AA in APS (currently this is set at £60,000 a year, but may be lower if you are affected by the tapered AA) and do not wish to pay the resulting tax charge, you may wish to know that if you exceed the standard £60,000 AA in relation to your APS benefits and have a total AA tax charge of £2,000 or more, you can ask the Trustee to pay your AA charge for you (in respect of your APS benefits only) in return for a reduction in your APS benefits, including any existing AVC funds. See Paying an AA charge for more details.

In the meantime, if you are currently saving AVCs, you may consider reducing your pension value for AA purposes by reducing your AVC savings from the 1st of a future month. If you are under your State Pension age and currently building up pension at the standard build-up rate in APS, you can choose a lower pension build-up rate at the next available APS Options date, usually 1 April and 1 October each year.

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Flexible Retirement

If you are thinking about opting out to draw or transfer your APS pension, you may wish to know that Flexible Retirement was introduced by British Airways from October 2012. The option allows active members one opportunity at any time from age 55 to obtain the Company's consent to reduce their working hours permanently and at the same time to draw or transfer out all or part of their pension benefits built up to that date. See Flexible Retirement for more information. The full terms and conditions for reducing hours for Flexible Retirement are available on the BA intranet.

The Flexible Retirement option is only available to active members of the Scheme, so it will cease to be available to you if opt out of APS.

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The Pension Protection Fund (PPF)

A member who has opted out of the Pension Scheme and drawn or deferred their BA pension benefits would receive a similar level of compensation from the PPF as an active member of the same age who had not opted out.

Various conditions would have to be met before a Scheme would even be accepted into the PPF. If accepted, the level of compensation you could potentially receive is determined by whether or not you have reached your Scheme Normal Retirement Age and is not dependent upon whether or not you are drawing a pension.

There is a capped amount above which the PPF will not pay, so if you have large pension benefits, you could lose any AVCs you have saved were the Scheme to be accepted into the PPF at any time in the future.

The amount of tax-free cash that can be taken at pension commencement is however based on the value of your pension, and would be affected by any restricted compensation amount available from the PPF if you are below Normal Retirement Age.

Please refer to the PPF website for more information on the PPF and the level of benefits it pays.

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If you decide to leave your pension scheme

If, after carefully considering all of the points above and taking regulated financial advice, you decide to leave APS, you will need to write to us to advise that you wish to opt out of the pension scheme and from what date. The earliest opt out date is the 1st of the month following one clear calendar months' notice from receipt of your letter.

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