Aerospace giant BAE Systems is believed to be plugging its £4.2bn FRS17
pension deficit, the second largest in the FTSE100, with cash from its sold-off
European defence businesses, writes Nicholas Neveling.
An analyst said the maker of the Joint Strike Fighter aircraft had used
excess funds from European disposals to help fill the pension hole.
‘It has been a strategy of the group to exit Europe in favour of the US and
it has used the excess from disposals to pay down the deficit,’ the analyst
Mike Costello, an analyst from Dresdner Kleinwort Wasserstein, said BAE’s
pension deficit was a ‘big issue’ that was going through ‘a complete review’.
‘The company is adopting a two-pronged approach. Employee contributions are
to increase and there are extra contributions going in from the company too,’
A BAE spokesman would not confirm that the company was using proceeds from
sold-off European businesses to help fill its pension gap.
‘We have not said anything like that (using income from disposals to pay down
the deficit). We are looking at solutions with our employees in an ongoing
process,’ the spokesman said.
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