BAE to pay £2bn to fill pension scheme hole

Defence contractor BAE Systems is under fire over plans to pay a bill of
almost £2bn to fill the hole in its pension schemes.

Despite announcing healthy annual results including a 16% rise in profits,
the news was overshadowed by details given of plans to close the hole in its
main UK pension fund.

The deficit stands at £2.4bn on a post-tax actuarial basis and will be met
60% by the company and 40% by employees.

BAE’s finance director George Rose said a similar strategy would be adopted
to tackle the deficit in its remaining UK and US schemes, which stands at about
£400m on a post-tax actuarial basis.

Employees will have to forego about £1bn in retirement benefits to fill the
remainder of the hole.

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