Defence giant to pay £500m into pension fund

Defence group BAE Systems is reportedly planning to invest £500m into its pension fund as part of a deal with employees to plug the scheme’s £2.8bn deficit.

The £500m payment would be the largest bail-out of a pension plan to date by a FTSE 100 company.

BAE Systems has offered the payment to aerospace unions and other employee representatives after long-running talks aimed at repairing its pension deficit, according to the Sunday Times.

In return, employees are being asked to consider proposals that would reduce benefits for scheme members. One option being studied would cut payouts to workers who take early retirement. The level of benefits paid to existing pensioners would not be affected.

BAE Systems said it would not comment while the talks continued. “It would be inappropriate for us to do so while we are in negotiations with employee representatives,” said a spokesman.

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