Glossary

The basic pension includes a pension for your spouse or partner when you die (if you paid for this cover). The Adult Survivor's pension is 2/3rds of the member's pension for all service for which Adult Survivor's pension cover contributions have been paid.

A legal spouse or registered civil partner would automatically qualify for this benefit. Members who are not married or in a registered civil partnership but who have a common-law spouse, live-in partner or someone financially dependent upon them to a substantial extent, can ask the Trustee to consider their dependant for a discretionary pension. See Surviving Dependant for more details.

The AVB is an agreed method of using assumptions to calculate the Scheme’s Technical Provisions. We agreed the assumptions with BA as part of the settlement agreement of 8 April 2019. The AVB does not include any allowance for future discretionary increases but does include discretionary increases that have already been granted.

The AVB + PP is another method of using assumptions to calculate the Scheme’s liabilities. The AVB + PP is based on the AVB but also assumes that future discretionary increases are granted in line with the proposed pattern of discretionary increases set out in the settlement agreement of 8 April 2019.

Set by HM Revenue and Customs. The maximum value of benefit a member can build up in a tax year without incurring a tax charge. The AA is currently £60,000.

From 6 April 2016 a 'Tapered AA' was introduced, which may affect active members who have earnings (defined by HMRC as Threshold Earnings) of £200,000 or more. See The tapered AA for more details.

The Money Purchase Annual Allowance (MPAA) will apply if you choose to access any defined contribution (DC) pension savings from an external arrangement whilst you are still a member of APS. See The Money Purchase AA for more details.

See The Annual Allowance (AA) page for more information about the AA.

The total market value of the investments and cash held by the Scheme, built up from contributions made by BA and the Scheme members plus investment returns.

British Airways plc or any other company in the British Airways group which uses APS to provide its employees’ pensions.

In addition to members' contributions, BA pays whatever is necessary to provide your benefits as advised by the Scheme’s actuary.

Your total pay within a band set by the Government each year, currently between £6,136 and £50,000. From 6 April 2016 members under State Pension Age, who have not selected the 1/54 (Flying Staff) or 1/58 (Ground Staff) pension build-up rate, pay an additional pension contribution of 3.1% of the Band Earnings. This was introduced by the Company following the launch of the Government’s new State Pension arrangements from April 2016.

The British Airways Pension Plan. Originally available for BA employees who were employed after 1 April 2003. BA employees who are not members of APS can save for their retirement by applying to join BAPP for future service. BAPP is also BA's arrangement for auto-enrolment – a legal requirement whereby BA must automatically enrol employees who have not joined one of the BA pension schemes (or who have been opted out of APS for more than 12 months) into BAPP every three years. British Airways' auto-enrolment date occurs every three years starting 1 January 2013. BAPP is administered by an external company, Aviva Life & Pensions.

APS members may opt-out of APS and join BAPP if they wish but the contributions paid by BA may be restricted if the member has 20 years or more pensionable service in APS. For more information about BAPP visit the BA intranet.

The calculation used to work out the pension you will receive when you retire.

(Pensionable Service x Retiring Pay) divided by build-up rate 52 for Flying Staff or 56 for Ground Staff.

The rate at which your pension grows in the Scheme while you are paying contributions. The standard rate is 52 for Flying Staff and 56 for Ground Staff.

APS members who are under their State Pension Age can also choose to pay less to build their pension at a slower build-up rate of 1/54 (Flying Staff) or 1/58 (Ground Staff). Members will pay the same contributions that they would pay for the standard build-up rate of 1/52 (Flying Staff) or 1/56 (Ground Staff) but BA will cover the cost of the additional employer’s National Insurance Contributions (NICs), currently 3.1% of Band Earnings, passed onto members by the Company following the launch of the Government’s new State Pension arrangements from April 2016.

An insurance policy that covers a proportion of a pension scheme’s liabilities and is held as an asset of the pension scheme. The scheme pays a premium to an insurance company in return for the policy, and the policy pays an income that is related to the liabilities insured. This removes the risk that the value of a scheme’s assets won’t be enough to meet future liabilities. The Trustee and BA have ultimate responsibility for making sure the Scheme can meet members’ benefits.

An insurance policy which replaces a pension scheme’s obligations to pay members’ pensions with individual annuity policies between the insurer and each member. The policy will reflect exactly the benefits provided under the pension scheme. As funding levels improve and pension schemes continue to mature, many schemes see buy-outs as the final step in reducing the risks involved in pensions.

A member who has chosen to stop paying contributions to the Scheme at or after Normal Retirement Age but has left their pension aside for drawing at a later date. Late retirement uplifts will be added to the pension for the period since contributions stopped to date of drawing. This should always be compared with the automatic position of continuing to pay into the Scheme and building up future service benefits.

A crystallised member continues to be covered for the death-in-service lump sum benefit and may save AVCs if they wish (this can affect Pension Input for the Annual Allowance).

From 6 April 2015, people with defined contribution (DC) benefits have greater flexibility on how they access their pension savings from age 55. AVCs you have paid into the Scheme are DC benefits, but you will have to transfer your AVCs out of the Scheme to one or more different pension providers if you want to access them under the Government’s flexible access rules.

You can choose to transfer just your AVCs out of the Scheme or you may choose to transfer your main Scheme pension out as well. Before transferring benefits out of the Scheme you should get free guidance from Pension Wise (www.pensionwise.gov.uk) to make sure any new arrangements meet your needs and that you fully understand how this will affect any tax you have to pay.

The full range of DC options is complex and the suitability of the options depends on the size of an individual's DC pot and retirement income requirements.

The difference between the value of a scheme’s assets and its liabilities, if the value of the assets is not enough to cover the scheme’s liabilities. Deficits are also sometimes referred to as shortfalls.

A form of protection from the Lifetime Allowance charge. Members must have registered with HMRC by 5 April 2009 for the protection to apply. You must tell us if this protection applies to you.

For more information, visit the HMRC website: www.hmrc.gov.uk

A form of protection from the Lifetime Allowance (LTA) charge. Members must have registered with HMRC by 6 April 2012 for Fixed Protection 2012 (FP12) to apply; by 6 April 2014 for Fixed Protection 2014 (FP14) to apply; or by 5 April 2016 for Fixed Protection 2016 (FP16) to apply. FP12 provides members with a personal LTA of £1.8m; FP14 provides a personal LTA of £1.5m; FP16 provides members with a personal LTA of £1.25m. Fixed protection can be lost if certain conditions are broken.

For more detailed information visit: www.hmrc.gov.uk

You can draw your pension straight away if you qualify and are retired by BA because of ill health; or if you are a pilot and you lose your licence due to medical reasons before Normal Retirement Age.

If retiring from contributory service, we will also include half potential service from your date of retirement to Normal Retirement Age (or age 63 if you were Ground Staff on 1 December 1989, have no breaks in service and are still Ground Staff when you retire on ill-health grounds). If you are currently building your pension up at the standard build-up rate of 1/52 (Flying Staff) or 1/56 (Ground Staff) this portion of your pension is calculated using your standard build-up rate.

If you are currently building your pension up at the lower rate of 1/54 (Flying Staff) or 1/58 (Ground Staff), this portion of your pension will be calculated using the lower build-up rate.

If you have less than 12 months to live you may be able to receive your entire pension as a tax-free cash sum whilst continuing to provide a pension for your dependants should you die. See What if I fall Ill? for more details.

A form of protection from the Lifetime Allowance charge. Members must register with HMRC before 6 April 2017 for Individual Protection 2014 to apply. Members who expect their benefits at retirement to be more than £1.25m can apply for the value of their pension benefits at 5 April 2014 is protected up to a maximum value of £1.5m. Members with Primary Protection cannot apply.

Detailed guidance about IP14 is available on the HMRC website: visit www.gov.uk

From April 2016, individuals who expect their benefits at retirement to be more than £1m can apply to protect the value of their pension benefits at 5 April 2016 up to £1.25m. For more details see www.hmrc.gov.uk/pensionschemes/pension-savings-la.htm.

It was the combined value of all pension and lump sum entitlements from all UK registered pension arrangements people belonged to, and had to be compared against the LTA set for the year you decided to draw your benefits.

Until 5 April 2023, a Lifetime Allowance tax charge was due on any pension benefits above the LTA. From 6 April 2023, the requirement to pay this tax charge was removed by the Government.

The value of your British Airways pension benefits to be compared against your LTA. This is worked out as 20 times your annual rate of pension, e.g. 20 x £6,000 p.a. = £120,000

Or, if you take a lump sum, the LTA value would be the cash value of your lump sum plus 20 times your remaining annual pension:

lump sum of £20,000 plus 20 x £4,200 p.a. = £104,000.

If, when drawing your BA pension, you have other pensions already in payment, the percentage of LTA used up by those pensions must also be taken into account. Where payment of any other pensions began before 6 April 2006, the value would be worked out as 25 times the annual rate of pension in payment at the date you draw your BA pension.

Before the LTA tax charge was removed in April 2023, if the total value of all your earned pension benefits exceeded your LTA at retirement, any benefits in excess of the LTA were subject to a Lifetime Allowance charge, which was deducted from your pension benefits and paid directly to HMRC.

Four types of protection existed, Primary Protection, Enhanced Protection, Fixed Protection (2012, 2014 and 2016), and Individual Protection (2014 and 2016).

The requirement to pay a Lifetime Allowance tax charge on any benefits that exceed a protected LTA was removed by the Government from 6 April 2023.

A new, single-tier State Pension replaced the Basic State Pension and earnings related State Pensions for men born after 6 April 1951 and women born after 6 April 1953 and who will therefore have reached State Pension Age on or after 6 April 2016.

To get any new State Pension, you will usually need at least 10 qualifying years (years in which National Insurance (NI) contributions have been paid or NI credits received), and for the full amount you need to have 35 qualifying years.

Visit the Government website www.gov.uk/state-pension to learn more about the State Pension.

As APS was contracted-out of the State earnings related pension arrangements, a deduction is made for periods of contracted-out service. The adjustments to the State Pension are complicated and vary for each member.

Your starting amount will be the higher of:

1. your State Pension built up under the old system (up to April 2016) (Basic State Pension plus any State Earnings Related Pension (SERPS) or State Second Pension you built up whilst not a member of APS and paying National Insurance contributions) or;
2. the new State Pension for qualifying years to April 2016 adjusted for past contracted-out service.

Individuals still have the opportunity to build up new State Pension for service from April 2016 if their State Pension at April 2016 was less than the full new State Pension. You can get a State Pension forecast at www.gov.uk/check-state-pension.

This is the age, set by the Scheme, at which your pension is due in full.

For Flying Staff = age 55

For Ground Staff = 60

At the date of your death this is someone who, in the opinion of the Trustee, is either:

• living with you in a relationship resembling marriage and with whom you are financially inter-dependent – such as a common-law spouse or partner; or
• someone who is financially dependent upon you to a substantial extent for the everyday necessities of life. There are special eligibility conditions for a child of a deceased member who is over age 23.

See also Surviving Dependant.

The total of the elements of your pay (or notional elements of your pay) designated as pensionable by British Airways. Active members were offered a one-off option to irreversibly 'unfreeze' pensionable pay up to the level of inflation. Active Members could take up the option by 31 December 2014 in return for additional contributions of 4.5% of pensionable pay. The contribution level will be reviewed at each Scheme 3-yearly actuarial valuation – but is capped at a maximum level of 4.5%. Pensionable pay for GSS staff who participated in the GSS Option is increased in line with the original GSS agreement made in 2003.

Pensionable Service is the period you have been a member of the Scheme for which contributions have been paid. This includes any time transferred from another Scheme and adjustments for periods of part time employment or changes in occupational

Pension Wise is a Government service from MoneyHelper that offers free, impartial pensions guidance about defined contribution pension options (including AVCs).

An appointment with Pension Wise is free and will help you understand what your overall financial situation will be when you retire.

A form of protection from the Lifetime Allowance charge. Available for members whose pension benefits value exceeded £1.5m at 6 April 2006. Members had to register with HMRC by 5 April 2009 for this form of protection to apply. Members who registered for Primary Protection are entitled to a personal Lifetime Allowance (PLTA) which is greater than the standard LTA.

For more information, visit the HMRC website: www.hmrc.gov.uk.

An investment strategy and practice which considers both financial returns and environmental, social and governance (ESG) factors.

This is calculated as the average of the best two years of Pensionable Pay in the five years before you leave the Scheme, retire or die. A 'year' for Retiring Pay purposes is any consecutive period of 365 days but one year does not need to be consecutive with another.

These are investments which aim to increase the value of a pension scheme’s investments (capital growth) with a lower income stream and typically produce higher returns over the long term, but with a higher level of investment risk.