Airline pilots have been protesting against plans to replace British Airways' final salary pension scheme at the airline's annual meeting.

The pilots are unhappy at plans to change the pension scheme to a money purchase plan for new employees this autumn.

The airline pilots union Balpa warned that the move could lead to recruitment problems for BA in a few years time.

But BA said it was confident that its replacement pension package would remain attractive to new recruits.

One of many

BA announced in May that it was to close its final salary pension scheme for new staff.

The company joined a list of other major UK firms - including Marks & Spencer and British Telecom - which have decided to change their pension schemes in order to put a cap on future pension costs.

Under a final salary scheme, an employee receives a fixed level of pension calculated as a proportion of his or her salary at retirement.

And the company has to bear the risk of poor performance from investments which make up that pension.

But under a defined contribution, or money purchase, scheme the employer invests money into a pension fund, which is used to buy an annuity on retirement.

Unlike in a final salary scheme, the worker bears the financial risk of how the investments perform.

Recruitment problems?

The airline pilots union Balpa said new entrant pilots would lose up to 12% in effective pension contributions under the new plans.

And it said this could cause future recruitment problems for BA.

"In five years time there's going to be an acute pilot shortage because we're hitting a bulge in the next five years of people who came into the industry together and who'll retire together," a Balpa spokesman said.

"If conditions for new pilots are worse then it's going to put BA at a disadvantage when it comes to recruitment.

"We're hopeful that BA will reconsider this move."

'Competitive' scheme

But speaking at the firm's annual general meeting, BA chairman Lord Marshall said the pension changes "should benefit shareholders from the greater certainty over long-term employment costs".

And BA said it did not think it would have problems recruiting new staff.

"We believe that our new scheme will be very competitive in the market place, and we're fully confident that BA will remain an attractive company for future employees," a spokesman said.