BAE Systems agrees pension rescue plan with unions

BAE Systems has agreed a plan with its unions to wipe out its huge pension fund deficit.

The aerospace and weapons company will pay in an extra £1.1bn over the next 10 years in cash and assets to help eliminate the deficit, which stood at £3.1bn at the end of 2005.

Both the company and its staff are also paying higher regular contributions.

Sign up to our weekly round-up of HR news and guidance

Receive the Personnel Today Direct e-newsletter every Wednesday

Email(Required)

OptOut

From time to time, we will send you emails about selected products, events and services from Personnel Today and OHW+ - but you can choose to opt-out at any time. If you do not wish to receive these emails, please tick this box.

Comments

This field is for validation purposes and should be left unchanged.

Δ

Although the scheme will provide reduced benefits in the future it will be kept open for current members.

To save £770m, other changes have been agreed:

• A formula will be used to reduce the expected pension if longevity improves further, but
  
• Staff will be allowed to work beyond 65 to offset the reduction
  
• Pension calculations will be made on the average pay earned in the final three years at work, not just the final year
  
• Ill-health and early retirement pensions will be reduced.