The deficit for the BAA Pension Scheme fell to £99m at the end of 2024, following a a 0.9 per cent increase in the discount rate, Heathrow's latest final results have revealed.

The group revealed that the defined benefit (DB) scheme, which closed to new members in June 2008, was 96.2 per cent funded on an IAS 19 basis as at 31 December 2024, up from 95.6 per cent in 2023.

This translated into a deficit of £99 million, down from £128m in 2023, as although scheme assets fell, from £2,782m in 2023 to £2,497m at the end of 2024, this was offset by a further fall in scheme liabilities, from £2,910m to £2,596m.

The group said that the £29m decrease in the deficit was largely due to actuarial gains of £35m attributable to a 0.9 per cent increase in the discount rate, rising from 4.5 per cent to 5.4 per cent.

In addition to this, service costs were around £13m, while the finance charge was £7m, up from £5m in 2023, and contributions paid into the scheme in the year totalled £14m, which is in line with contributions in 2023.

The group confirmed that no deficit repair contributions have been paid in the year, which is in line with previous years. It also confirmed that the group directors believe that the scheme has "no significant plan-specific or concentration risks".

At 31 December 2024, the largest single category of investment was a liability-driven investment (LDI) mandate, which covered 33 per cent of the scheme's asset holding, with a value of £815m.

LDI holdings are portfolios of bonds, repurchase agreements, interest rate and inflation derivatives which are intended to protect the scheme from movements in interest rates and inflation, so that the fair value of this element of the portfolio moves in the same way as the fair value of scheme's obligations

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