BAE to pay £2bn to fill pension scheme hole
FD says company will use same approach to close other UK and US schemes
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.