Rolls-Royce has offered to pump £500m into its pension funds and increase the company’s contributions if existing staff accept its decision to close the two remaining final salary schemes that are still open to new members.
Its pension schemes currently have 119,054 members, but the main final salary scheme, the Rolls-Royce Pension Fund, was closed to new members in 1999.
The engineering group said it would seek to introduce stable and affordable pension arrangements for its employees and address its pension deficit. The company has already started consultations with staff on the new proposals.
The proposals follow a 2003 agreement made by the company to reduce the deficit of the main Roll-Royce pension fund by £567m.
If staff agree, the company will join a growing list of employers that have either scrapped or altered their pension schemes to address deficits, including Rentokil Initial, Co-op Group and Scottish Power.