British Airways PLC's pension deficit recovery plan was approved by the U.K. Pensions Regulator, company spokesman James von der Fecht confirmed Monday.
In June, when an agreement was reached with pension trustees on the recovery plan, BA spokeswoman Laura Goodes said the agreement was the “one outstanding item” before BA could seek shareholder approval for a planned merger with Spain's Iberia Lineas Aereas de Espana. The agreement needs Iberia's OK, too.
But Mr. Von der Fecht said Iberia has never raised pension funding as an issue, and said the merger is proceeding apace.
“It's not as if the merger has been held up” by pension funding, he said.
BA and trustees agreed in June that the company would make additional contributions to its two London-based pension funds in excess of its regular £330 million ($518 million) annual payments. The £8 billion New Airways Pension Scheme and the £6.4 billion British Airways Pension Scheme, London, will receive 100% of any amount over the £1.8 billion year-end cash balance threshold, up to £150 million. Beyond the £150 million mark, the funds will receive 50% of the excess cash to help reduce a £3.7 billion combined pension shortfall.