Lufthansa has agreed a new pension deal for loss-making airline bmi ahead of its sale that will see the German airline contribute GBP£84 million (USD$133.8 million) and relinquish further responsibility for payments.
Lufthansa said on Wednesday the bmi pension scheme will now enter the UK Pension Protection Fund (PPF) after the UK pension regulator rejected a plan for Lufthansa to hold onto the liabilities as part of the deal to sell bmi to British Airways' owner IAG.
The PPF was set up in 2005 to protect the savings accrued by private sector workers.
The voluntary contribution from Lufthansa will help cover the gap in expected pension payments and those that would be covered under the PPF.
Bmi's pension deficit is estimated at around GBP£180 million and an agreement on the scheme had been a key part of talks on its sale.
"This agreement provides the bulk of the pension benefits for a vast majority of members of the defined benefit scheme in spite of the high pension deficit and the general financial difficulties faced by bmi," Lufthansa said.